Clean energy investment fund calls in administrators

Publically-listed clean energy group Viridis Clean Energy has been placed in the hands of administrators after failing to complete a recapitalisation of the company.

The director of Viridis Clean Energy appointed administrators Daniel Bryant and Nicholas Martin of insolvency and advisory firm PPB Advisory late on Friday of last week, after a long battle to try and reduce the company’s debt load by selling assets.

Viridis Clean Energy is a clean energy infrastructure fund that was established in 2004 and started trading in August 2005. The company was managed by Viridis Investment Management Limited, and had investments in 43 projects in the US and Britain, with a focus on landfill energy projects.

While the company’s shares hovered above $1 for much of 2007, the arrival of the GFC and a downturn in the fortunes of the clean energy sector left the company exposed with net debt of almost $260 million in mid-2008.

The company has been on an asset sale program ever since and also internalised management of the fund in 2009.

After the company entered a trading halt on February 1, it announced it had completed the sale of its US landfill gas-to-energy business on February 2.

The $7.4 million raised in this sale was used to pay down debt, reducing the level of outstanding borrowings to $7.3 million.

But while Viridis had previously announced that it had the “in principle” support of its lenders, the wolves were circling.

Its British lenders had repeatedly extended the deadline by which Viridis needed to pump a further $6.5 million into the business. Recently, the deadline had been pushed back to January 31, and then pushed again to February 28.

However, it appears time has finally run out. The directors have now placed six companies related to Viridis in administration.

PPB Advisory said it would be business at usual as the fund while a review of operations was launched.

SmartCompany unsuccessfully attempted to contact Viridis’ managing director Edward Northam and chief financial officer Duncan Jewell this morning.

The administrators are now expected to start the process of selling Viridis’ remaining British landfill assets. These generated revenue of $44 million in 2009-10, and EBITDA of $15.2 million.