Struggling onshore and offshore turbine manufacturer Senvion has obtained the support of its lenders and bondholders to continue operations as it attempts to restructure.
The company, its lenders and main bondholders have signed a binding loan agreement, setting out terms for a €100M (US$113M) debtor-in-possession (DIP) facility, a kind of finance for companies that are financially distressed that is usually used to facilitate the reorganisation of a debtor-in-possession.
Signing an agreement of this type allows a company to raise capital to fund its operations. DIP differs from other types of financing in that it usually has priority over existing debt, equity and other claims. The super-senior secured DIP facility arranged by Senvion has a tenure of 12 months.
In a statement, the company said the facility will enable Senvion to continue operations following last week’s self-administration filing. The DIP facility received board approval and will allow ‘substantial drawings,’ enabling the company to stabilise and provide funds to its subsidiaries that are not insolvent.
Senvion chief executive Yves Rannou said, “We would like to thank both our lenders and main bond holders for their support in agreeing to provide us with a DIP facility.
“This is particularly helpful since we managed to significantly ramp up our installations in Q1 2019. This is encouraging news for all of us and for our transformation process. We have received support from our customers and suppliers and continue a close dialogue with them.”
Senvion installed 366 MW worldwide in Q1 2019, more than twice as much as in Q1 2018. The majority of new capacity was installed for customers in growth markets in South America and Australia, where the company said it has significantly improved execution. With around 120 MW in Chile and Argentina and nearly 110 MW in Australia, these growth markets account for over 60% of the installations in the first quarter. Senvion also built and installed its first turbine in India, another key growth market. Senvion’s service business also continued to develop positively.