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Anaergia is selling six anaerobic digestion facilities in Italy to lender Arjun Infrastructure Partners before finishing all of the projects, citing inability to secure additional financing in a release Thursday. Ontario-based Anaergia will receive a “de minimis” cash consideration from Arjun as a result of the deal.
As a result of Thursday’s agreement, Arjun is terminating $145 million in Anaergia’s loan obligations in exchange for approximately $55 million in loans between the companies and the equity portion of the Anaergia subsidiary that owns the Italian projects.
“The transaction reduces our capital requirements and immediately helps improve liquidity for the company,” Anaergia CEO Brett Hodson said in a statement. “We look forward to assisting Arjun and the Project teams to complete construction and further advance other business development opportunities in Italy.”
The transaction comes less than two years after Arjun provided Anaergia with 100 million euros in mezzanine financing to support its plans in Italy.
A 2021 release announcing the loan mentioned the money could support development of 10 to 12 facilities. Anaergia most recently announced in March that it had commissioned a facility in Northern Italy that has capacity to anaerobically digest 40,000 metric tons of food waste and convert it to 3.9 million cubic meters of renewable natural gas.
While the company has announced commissioning of two Italian plants since last year, Anaergia has faced challenges bringing the portfolio of facilities online. On its first quarter earnings call in May, executives noted delayed electrical utility connections and other issues, even as they insisted that European support for biomethane projects provided a healthy tailwind for the projects. Executives said on the call that Anaergia had pushed back the opening dates for certain facilities to the end of the year.
Following Thursday’s deal, Anaergia said it will continue to participate in engineering, procurement and construction work on the projects through a cooperation agreement with Arjun, but it “has no further requirements to provide additional capital.”
Anaergia is in the midst of a strategic review as a result of challenges both in Europe and North America, which Hodson cited in his explanation of the agreement.
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