Enviva sinks after raising substantial doubt of remaining going concern

The company said in its earnings release, “Absent a significant and near-term increase in wood pellet market pricing, we expect the Q4 2022 Transactions will continue to have a negative impact on our profitability, cash flows, and liquidity through 2025. In addition, as a result of operational challenges experienced at the Company’s plants during the first and second quarters of 2023 and a wood pellet market dynamic that has largely held market prices at levels unsupportive of creating margin through spot purchases or spot sales, the Company anticipates that, absent a cure, it may be in breach of certain of its covenants under its senior secured credit facility as early as the reporting date for the measurement period ending December 31, 2023. These conditions and events in the aggregate raise substantial doubt regarding the Company’s ability to continue as a going concern.” The shares of Enviva are down 76% to 92c in morning trading.