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Waste-to-fuel firm retains advisors, plans California plant sale out of bankruptcy

A Canadian waste-to-fuel firm has retained bankers and is planning to conduct a sale of a state-of-the-art plant near Los Angeles.

Anaergia, an Ontario, Canada-based waste-to-fuels firm, has hired an advisor for a strategic review, and is planning to run a bankruptcy sale of its plant in Rialto, California.

Rialto Bioenergy, the Anaergia subsidiary that owns the plant, filed for bankruptcy in May, and is planning to conduct a sale with a milestone to consummate a transaction by April, 2024, according to bankruptcy documents.

Rialto is owned 51% by Anaergia and 49% by Igneo Infrastructure, a stake it acquired in 2020.

Anaergia meanwhile has retained Piper Sandler to conduct a strategic review of the company, citing management’s previous statements that it will need additional liquidity to continue as a going concern.

A source familiar with the matter said Piper Sandler will also advise on the Rialto asset sale, pending approval by parties to the Chapter 11 process. Representatives of Anaergia and Piper Sandler did not respond to requests for comment.

B. Riley Securities has also been retained as financial advisor and valuation consultant to the company, filings show.

Rialto Bioenergy’s bankruptcy, filed in the Southern District of California, was precipitated by a lack of feedstock available to the facility as a result of a delay in the implementation of organic waste diversion laws in Los Angeles. The delay caused insufficient revenues to cover Rialto’s costs and debt service, according to the company.

It owns a multi-feedstock bioenergy facility that converts organic waste into carbon-negative RNG, with the capability to also generate renewable electricity and fertilizer. The facility can process up to 1,000 tons per day of waste and convert it into up to 1,000,000 MMBtu per year of RNG.

In Chapter 11, Rialto reached an agreement for a $30m debtor-in-possession loan arranged by UMB Bank, a stipulation of which was to retain an investment banker to sell the waste facility. 

A final hearing for approval of the DIP loan is scheduled for October 16, while the motion to approve sale procedures will be heard at a hearing on October 30.

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