Felsberg Advogados advised Renova Energia and its subsidiary Chipley in connection with DIP financing in the amount of BRL 362.5 million granted under the coordination of Quadra Gestao de Recursos for the completion of Phase A of the Alto Sertão III Project (a wind park) and secured by a fiduciary assignment of receivables and blocked bank account mechanism. The financing is for a nine-year term, with interest at 18% p.a.. Drawdown was on 5 March. All of Renova’s bank creditors agreed to the DIP financing, including major creditor BNDES, which provided a bridge loan of almost BRL 1 billion to Alto Sertão III Phase A.
The 61 companies of the Renova Energia group were involved in a dramatic approval of its judicial reorganization at the end of 2020, which required a court request by Felsberg for a cram-down of dissenting creditors. Two plans had been presented, one for 26 companies comprising the Alto Sertão III Phase A wind power generation project and the other for the remaining 35 companies. The consolidated plan was approved by a significant majority of creditors. The Alto Sertão III Phase A plan had already been approved by the majority of creditors in the classes labor, collateral, and micro and small companies. However, 49.97% of unsecured creditors, computed by credit value, approved the plan, when the required approval was 50% plus one.
Felsberg's cram-down request was granted by Judge Paulo Furtado de Oliveira Filho of the 2nd Bankruptcy and Judicial Reorganization Court (RJ) on 18 December 2020. The approval completed an impressive cycle of five large restructuring projects in different areas of the economy that Felsberg Advogados was involved in during the last quarter alone of 2020.
Fabiana Solano, the partner leading the Felsberg team, notes that the DIP financing is an important step in the recovery of Renova Energia, as it will allow the conclusion of the works of the Alto Sertão III Phase A, thereby generating approximately 400MW of energy, that is, capacity sufficient to supply 420,000 residences for one year. The Felsberg team also included partners Maria da Graça Pedretti and Thomas Felsberg, and associates Thiago Dias Costa, Marina Serachiani Clemente and Felipe Lourenço.