Item 1.01 Entry Into a Material Definitive Agreement.
Subscription Agreements
On February 28, 2023, Enviva Inc. (the "Company") entered into subscription
agreements (the "Subscription Agreements") with certain accredited investors
(the "Investors") to sell shares of Series A Preferred Stock of the Company, par
value $0.001 per share ("Preferred Shares"), having the terms as set forth in
the Company's Certificate of Designations for Preferred Shares, in a private
placement for gross proceeds of $250 million (the "Private Placement"). The
Private Placement priced at the official closing price of the New York Stock
Exchange (the "NYSE") on March 1, 2023, which was $37.71 (the "Price Per
Share"). The Company will issue approximately 6,629,541 Preferred Shares,
subject to adjustment for rounding, to the Investors pursuant to the
Subscription Agreements. Each Preferred Share is convertible into one share of
common stock of the Company, par value $0.001 per share ("Common Stock"),
subject to adjustment for any stock dividends, splits, combinations, and similar
events, and will automatically convert into Common Stock upon shareholder
approval of the conversion by a majority of the votes cast, which is expected to
be obtained on or before June 15, 2023. The holders of the Preferred Shares will
be entitled to participate equally and ratably with the holders of the Common
Stock in all dividends or other distributions on the shares of Common Stock. The
Preferred Shares rank senior in preference and priority to all classes or series
of Common Stock with respect to dividend rights and rights upon liquidation,
dissolution, or winding up of the Company. The Company expects to use the net
proceeds of the Private Placement to fund its growth capital program, as well as
repay borrowings under its revolving credit facility, and for general corporate
purposes. The closing of the Private Placement is expected to occur on or around
March 20, 2023.
The Subscription Agreements contain customary representations, warranties, and
covenants of the Company and the Investors, including an agreement by the
Company to seek shareholder approval of the issuance of Common Stock to the
Investors. On February 28, 2023, the Investors entered into a voting agreement,
pursuant to which they agreed to vote shares of Common Stock held by them in
favor of the conversion.
Pursuant to the Subscription Agreements, the Company has agreed to enter into a
registration rights agreement (the "Registration Rights Agreement") with the
Investors in connection with the closing of the Private Placement, pursuant to
which the Company will agree to file and maintain a registration statement with
respect to the resale of the Common Stock issuable upon conversion of the
Preferred Shares on the terms set forth therein. The Registration Rights
Agreement will also provide certain Investors with customary piggyback
registration rights.
The foregoing description is not complete and is qualified in its entirety by
reference to the full text of the form of Subscription Agreement and the form of
Registration Rights Agreement, which are filed as Exhibits 1.1 and 1.2,
respectively, to this Current Report on Form 8-K (this "Current Report") and
incorporated herein by reference.
Relationships
The Investors include direct or indirect subsidiaries of Riverstone Holdings LLC
("Riverstone"), Inclusive Capital Partners, L.P. ("In-Cap"), and BTG Pactual
("BTG"). Certain current and former directors and officers of the Company also
are Investors, including Ralph Alexander (a director of the Company), John C.
Bumgarner, Jr. (a director of the Company), Gary L. Whitlock (a director of the
Company), Thomas Meth (a director of the Company and the Company's President and
Chief Executive Officer), and John K. Keppler (former President and Chief
Executive Officer of the Company). Riverstone and In-Cap are each beneficial
owners of more than 5% of the Company's outstanding Common Stock. The Investors
and their affiliates together own more than 50% of the Common Stock outstanding
prior to the Private Placement. The shares of Common Stock to be issued upon
conversion of the Preferred Shares is equal to approximately 9.81% of the Common
Stock outstanding as of March 1, 2023. As of the date of the Subscription
Agreements and the date of this Current Report, except as disclosed in this
Current Report and the Company's other filings with the Securities and Exchange
Commission, there are no other material relationships between the Company or any
of the Company's affiliates and any of the Investors, other than in respect of
the Investors' respective Subscription Agreements. The terms of the Private
Placement were approved by an independent committee of the board of directors of
the Company.
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Item 3.02 Sale of Unregistered Securities
The information regarding the Private Placement set forth in Item 1.01 of this
Current Report is incorporated herein by reference. The Private Placement is
being made in reliance upon the exemption from the registration requirements in
Section 4(a)(2) of the Securities Act of 1933, as amended. The Company believes
that additional exemptions may exist for these transactions.
Cautionary Statements
This Current Report includes "forward-looking statements" within the meaning of
federal securities laws. Such forward-looking statements are subject to a number
of risks and uncertainties, many of which are beyond the Company's control. All
statements included in this Current Report, other than historical facts, are
forward-looking statements. All forward-looking statements speak only as of the
date of this Current Report. Although the Company believes that the plans,
intentions, and expectations reflected in or suggested by the forward-looking
statements are reasonable, there is no assurance that these plans, intentions,
or expectations will be achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied, or forecast in such
statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
1.1* Form of Subscription Agreement, dated February 28, 2023, by and among
the Company and the Investors named therein.
1.2 Form of Registration Rights Agreement, by and among the Company and
the Investors named therein.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL.
* Schedules and similar attachments have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The registrant will furnish a supplemental copy of
any omitted schedule or similar attachment to the Securities and Exchange
Commission upon request.
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