Pellet producer Viridis Energy for sale

By Anna Simet | April 20, 2016

Publically traded Canadian pellet production company Viridis Energy Inc. is up for sale.

Just weeks after the company announced it would cease operations at Okanagan Pellet Co., its West Kelowna, British Columbia, wood pellet production facility, the company informed investors that its lender, Royal Bank of Canada, has made a demand for payment in full of OPC’s outstanding debt, and that the company could not pay the $2.61 million sum by the date specified in the demand notice.

Viridis stated its reasons for ceasing operations at OPC as being recently discovered structural challenges of the building, and additional requirements from local authorities concerning dust management. According to the announcement, “After completing substantial upgrades over the past 10 months to address regulatory requirements, the capital outlays required to address the recent concerns and restore operations were beyond the company’s existing resources.”

On April 20, the company reported all of its assets as being up for sale, which includes three subsidiaries: OPC, Scotia Atlantic Biomass and Viridis Merchants Inc.

Viridis said it is cooperating with RBC to facilitate an orderly sale of OPC assets, and is working with FutureMetrics LLC to solicit interest for the potential sale of Viridis Energy and all of its assets.   

Viridis stated it will consider offers for each subsidiary separately or as a whole, and that the sale as a whole would consist of a purchase of the shares of the publicly traded company. The potential structure and timing of the sales/acquisitions are discussed in a Confidential Information Memorandum that is available to interested parties after the execution of a Non-Disclosure Agreement.  Interested parties are to contact FutureMetrics.

Viridis acquired the 60,000-ton OPC plant in 2010, and has since struggled with what it has described as ever-increasing government regulatory oversight, completing major plant upgrades and bringing the facility back online.

The company acquired its 120,000-ton Scotia Atlantic Biomass plant in 2012, and its newest venture, Viridis Merchants Inc., serves as both an aggregation and trading service of wood pellets and other alternative energy sources.