Location: Lakeview, Oregon//
Red Rock Biofuels (“RRB” or “Company”) was a biofuels producer developing a plant in Lakeview, OR (“Lakeview Facility”) to produce sustainable aviation fuel (“SAF”), renewable diesel (“RD”) and bio-naphtha from woody biomass feedstock.
Due to cost overruns and the impact of the COVID pandemic, construction at the plant stalled several times. Additionally, the original equipment used to produce SAF limited Lakeview Facility’s ability to qualify for environmental credits, rendering the project uneconomical.
Services & Focus
Energy & Power
GLC ADVISORS’ ROLE
GLC was hired in September 2021 to source completion financing for the project and/or find a buyer for all or a portion of the assets. GLC worked closely with the company to identify a value-maximizing redesign of the plant, including replacing faulty existing equipment with streamlined and lower carbon intensity production characteristics.
GLC held a financing / sale process in January 2022, including project finance and infrastructure investors and strategics. Concurrently, GLC negotiated with existing and potential offtakers to reduce commodity pricing risk.
In response to investor feedback, GLC re-marketed the Lakeview Facility as a redesigned SAF project. The process was run as an Article 9 foreclosure sale, thus setting a timeline for potential bidders to allow them a “last-chance” bid. GLC successfully negotiated a sale to NEXT Renewable Fuels (“NEXT”).
On April 14, 2023, bondholders credit bid their secured claims in the Article 9 foreclosure sale and simultaneously sold Lakeview Facility’s assets to NEXT. Plans for the Lakeview Facility are to produce green hydrogen and RNG, which significantly improves the project economics.
- GLC led a comprehensive marketing process that resulted in the RRB assets being sold to NEXT Renewable Fuels and allowed consenting RRB Noteholders to participate in the development of the Lakeview RNG Facility.
- GLC worked closely with NEXT management, RRB management and the RRB Noteholder Trustee to facilitate a multi-step credit-bid asset sale which allowed the bulk of the RRB assets to be repurposed.
- GLC successfully articulated NEXT’s Lakeview RNG Facility potential to RRB Noteholders and facilitated in the resolution of all outstanding claims and liens to allow for a clean transfer of asset title via foreclosure.
- Redeveloping Lakeview Facility as an RNG and green hydrogen facility materially reduces offtake risk, reduces cash flow volatility and provides potential upside for RRB Noteholders.
Successful Sale of Assets
RRB was sold for preferred equity in NEXT, who will redevelop a significant portion of the core RRB infrastructure.
New Ownership Committed to Growth
GLC identified and advised new management team with the expertise and credibility to create reliable returns for investors.
Improved Financial Outlook for Investors
Production of RNG and green hydrogen by Lakeview Facility reduces offtake risk, offsets RIN + LCFS volatility and improves possible recovery for RRB bondholders.
Achieved Satisfaction From All Relevant Parties
GLC successfully articulated Lakeview Facility goals to bondholders and resolved outstanding liens for a clean transfer of assets.