Noble Environmental Power LLC, a wind farm owner, said Sept. 15 that it is voluntarily filing for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for Delaware.
In connection with the proceeding, the company and Paragon Noble LLC, which currently owns a controlling interest in Noble Environmental, have agreed that debt owed to Paragon Noble will be extended and a portion of the debt will be converted to equity. Upon completion of the proceeding, Paragon Noble will own 100% of the restructured Noble Environmental.
Northern Environmental, a holding company, is the only legal entity involved in the proceeding. None of the Noble companies that own, operate or manage the company’s seven wind farms in New York and Texas are involved in the proceeding. Payments to all vendors and suppliers providing goods and services to the wind farms will continue to be made in the ordinary course of business.
Kay McCall, Chief Executive Officer of Noble Environmental Power, said: “NEP is pleased to be moving forward with a financial restructuring that will strengthen our company’s financial position by reducing long-term debt and enhancing financial flexibility, putting us in a better position to continue to supply clean energy to customers. Importantly, this process will avoid disruption to our business, our employees and the communities in which we operate.”
The financial restructuring is expected to be completed by the end of 2016, assuming various regulatory and other approvals are obtained as anticipated.
Noble owns and operates 726 MW of wind energy projects in New York and Texas, and is based in Essex, Conn. Its wind farms in New York from the company website are:
- Noble Altona Windpark, Clinton County, NY, 97.5 MW;
- Noble Chateaugay Windpark, Franklin County, NY, 106.5 MW;
- Noble Ellenburg Windpark, Clinton County, NY, 81 MW;
- Noble Clinton Windpark, Clinton County, NY, 100.5 MW;
- Noble Bliss Windpark, Wyoming County, NY, 100.5 MW; and
- Noble Wethersfield Windpark, Wyoming County, NY, 126 MW.
McCall said in opening day testimony filed at the court that the Noble Environmental Power (NEP) ownership is divided into several classes of voting and non-voting interests. The voting interests in NEP, on a fully diluted basis, are currently owned approximately 28% by JPMP Wind Energy (Noble) LLC, which is an indirect subsidiary of JPMorgan Chase & Co.; 54% by Paragon Noble, which is also the secured lender of certain indebtedness guaranteed by the debtor and secured by certain of its assets; 14% by CPP Investment Board (USRE II) Inc., which is a subsidiary of the Canada Pension Plan Investment Board; and 4% by individuals, trusts and limited liability companies.
Wrote McCall about the reasons to seek Chapter 11 protection: “Simply put, NEP’s assets are worth less than its debts, and NEP will be unable to pay its guarantee obligations to the Lender when they mature on July 31, 2017. Accordingly, chapter 11 will enable NEP to recapitalize its equity ownership, reduce its secured debt, lower its debt service, and extend the maturity of its secured debt by five (5) years. In addition, NEP currently holds unencumbered cash totaling approximately $5.9 million, which will enable NEP to continue to operate in the ordinary course during the Chapter 11 Case without the need for debtor-in-possession financing or consent from a secured lender holding a lien on its cash and cash equivalents.”