CalPlant, Bondholders Implement Value-Maximizing Sales Process by Key Restructuring

WILLOWS, Calif., Oct. 5, 2021 /PRNewswire/ -- CalPlant I, LLC ("CalPlant" or the "Company"), a Northern California-based company focused on manufacturing sustainably-sourced building products, including the creation of the world's first no-added-formaldehyde, rice straw-based medium density fiberboard, Eureka™ MDF, today announced it has entered into a Plan Support Agreement (the "PSA") with its senior bondholders, while pursuing a sale of the Company. The PSA provides for a comprehensive financial restructuring of the Company's debt and the investment resources to complete the commissioning of the Company's manufacturing facility, and first ever rice straw-based MDF.

To facilitate the sale process and implement the PSA, the Company has voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The Company will continue to operate in the normal course without disruption to its vendors, customers, or employees, and will have sufficient liquidity to meet its financial obligations throughout the restructuring process.

Jeffrey Wagner, CalPlant's Executive Chairman, commented, "The road to fully commissioning our plant has not been smooth. We started commissioning our facility in early March 2020, then the pandemic hit. Suddenly, the usual challenges and delays associated with a startup were compounded with navigating a startup using first-of-its-kind technology during a global pandemic. Still, our team remained dedicated, resilient, and ready to pivot to continue our momentum towards completion. Today's actions are a testament to our team's relentless determination to continue pressing forward despite the numerous road bumps we have hit along the way."

CalPlant is ideally located in the Sacramento Valley, an area estimated to have an annual historical quantity of over 1.5 million tons in rice straw waste. Once operating at full capacity, the Company expects to process around 280,000 tons of otherwise non-recyclable rice straw from its surrounding regions per year to produce sustainable MDF products. This pioneering process will help eliminate the need for post-harvest re-flooding, thus reduce water usage and methane emissions to help drive local and global economic development and transformation.

"We are confident that leveraging the benefits of the Chapter 11 process will allow us to emerge with a stronger financial structure that enables us to continue leading the manufacturing industry with innovative sustainable MDF," Wagner continued. "We are also encouraged and thankful to have the support of our bondholders and Board of Directors, which we believe represents their confidence in our plan of reorganization and our ongoing operations and we expect to move efficiently and successfully through this voluntary restructuring and sale process."

The Company has secured commitments for up to $30.1 million in Debtor-in-Possession (DIP) financing from certain of the Company's senior bondholders to support the business during the Chapter 11 process. Subject to court approval, CalPlant estimates that substantially all trade vendors who will have an ongoing business relationship with the Company will be paid for goods and services in the normal course of business without interruption.

Wagner added, "We want to thank our CalPlant team for their continued dedication and commitment to what our Company is working hard to achieve. Their resilience and passion gives me great confidence in our ability to successfully exit this process even stronger, allowing us to continue our commitment to innovate products and solutions that create a positive impact on our environment."

Wagner concluded, "We also want to thank our supply base, including our rice farmers, balers and transportation partners, who play an invaluable role in putting our innovative products into the marketplace. We could not achieve success without them, and we greatly appreciate their ongoing support as we work to strengthen our capital structure for a mutually beneficial long-term partnership. Finally, we thank our customers for their continued patience and support as we continue to innovate and improve our product mix to provide the best eco-friendly MDF in the market."

CalPlant intends to conduct a court-supervised sale process and complete the sale through a Chapter 11 plan. CalPlant expects that the deadline to submit qualified binding bids will be established at a later date pursuant to bidding and sale procedures to be approved by the court. Interested parties should contact Sheon Karol, [email protected], (646) 391-6913, or Peter Richter, [email protected], (630) 291-6027.

Additional information, including court filings and other documents related to the Chapter 11 case, are available at  https://cases.primeclerk.com/calplant, by calling (877) 677-6566  (Toll-Free) or (929) 298-3984 (International), or by emailing inquiries to [email protected].

The Company is being advised by Morrison & Foerster LLP, as restructuring counsel, and Paladin, as financial advisor and investment banker.

About CalPlant CalPlant and its predecessor company, CalAg, LLC, have spent many years researching, developing, and patenting a process to make high-quality MDF using annually renewable rice straw as the feedstock, the disposal of which has posed environmental issues in California for decades. It has worked extensively with machinery manufacturer Siempelkamp to develop a facility with production capabilities well-suited to the MDF markets the plant will be serving. CalPlant is the world's first commercial-scale manufacturer of no-added-formaldehyde, rice straw-based MDF. For more information, please visit www.eurekamdf.com.

Media Contacts
Jennifer Mercer
Paladin for CalPlant
[email protected]

Liz Gonzalez
Paladin for CalPlant
[email protected]

Savanna Howie
GS&F for CalPlant
[email protected]

SOURCE CalPlant