Hot Water: Financial Woes Hit Raser, Shoshone Renaissance

In Utah and Idaho, the news is bleak. Raser Technologies, Inc. has announced that it and all of its wholly-owned subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Meanwhile, Riverside Public Utilities says it will not meet its very ambitious renewable energy goal because of the failure of Shoshone Renaissance to secure funding for a 46 MW geothermal power plant.

The Riverside Board of Public Utilities has reportedly approved the termination of the PPA with Shoshone Renaissance since it could not fulfill its contract and the utility finds itself using about 20% renewable energy, rather than the 37% the geothermal plant would have raised that figure to. The tribe’s website itself (www.nwbtechnology.com) is simply gone.

Razer is looking to restructure the company’s business and capital structure, and it has drawn up a Plan Support and Restructuring Agreement dated April 28. Under the terms of the plan, the company will restructure substantially all of its liabilities, including over $90 million of secured and unsecured debt and over $5 million in trade obligations and other claims, and will receive an infusion of new capital to stay in business.

Back in March, Raser said it was looking to sell or merge the company, which clearly didn’t happen. The company’s cash resources, nondiscretionary expenses, debt and near term debt service obligations were untenable at that time.

The company’s Chairman and CEO Nick Goodman pointed out that steps would be taken to ensure the day-to-day operations and the delivery of power from its Thermo No. 1 plant. He said that “These steps include obtaining a committed $8.75 million debtor-in-possession financing facility from two of our bondholders.” He added that the action “will provide long-term relief from our debilitating legacy debt and allow us to pursue development of innovative geothermal and other renewable energy solutions. We are optimistic that the strong support we have received from our creditors will facilitate an accelerated pace for our reorganization and our exit from bankruptcy.”

A year ago, the company was approved for a $33 million grant for the Thermo No. 1 plant, with the money to come from the American Recovery and Reinvestment Act. The company was to receive the funds within five business days of the announcement and Raser had said that those funds would go to retire debt and obligations relating to the project.

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