Waste management company New Earth Solutions Group has entered administration, following the breakdown of takeover negotiations.
The announcement was made earlier this week in a letter to shareholders of the New Earth Premier Fund.
Fund director, Michael J Richardson, wrote: “The senior lenders are currently in discussions with their advisers concerning what further options they wish to pursue as senior secured creditors of the New Earth Companies. Once their proposed course of action has become clearer, we will write to you again in respect of the implications for the Fund.”
New Earth was in talks with an unnamed developer of large combined heat and power plants over restructuring New Earth Solutions Group operations.
After no progress was made in reaching an agreement with senior lenders, proposals were put forward in early 2016 which offered to provide a €50m equity injection to restructure the company’s balance sheets. This was rejected by senior lenders.
An agreement was then reached for the developer to purchase the senior debt from the senior lenders if certain conditions were met by the end of May.
After accounts for the year ending 31 January 2015 were filed, however, customers threatened to stop taking off-takes if bank guarantees were not given.
According to reports, the lenders were not prepared to accelerate payment requests by customers or accept the developer’s offer of assistance.