A Northern California plant for converting rice-farming waste into a wood substitute filed for bankruptcy protection after work stoppages and cost overruns triggered a roughly $344 million municipal-bond default, WSJ Pro Bankruptcy reported. CalPlant I LLC said the road to converting rice-farming waste into fiberboard from a new plant in Willows, Calif., “has not been smooth” and sought protection from creditors in the U.S. Bankruptcy Court in Wilmington, Del., on Tuesday to look for a potential buyer. If no buyer emerges, CalPlant expects to hammer out a debt restructuring with senior bondholders, some of which have agreed to supply $30.1 million to finance the chapter 11 process through the purchase of new taxable bonds, according to court papers. CalPlant Executive Chairman Jeffrey Wagner said the company began bringing its facility online in March 2020, shortly before the COVID-19 pandemic erupted in the U.S. The usual challenges associated with a startup were compounded by rolling out new technology during a global pandemic, he said. Construction problems also plagued the operation, located about 85 miles north of Sacramento, Mr. Wagner said. It is among the first to make fiberboard from rice straw, a waste product of rice farming. The Sacramento Valley produces roughly a fifth of the nation’s rice, the company said. The plant has been making the fiberboard since late 2020 but isn’t yet fully operational. Most of CalPlant’s debt was taken on to build and operate the plant and was issued by the California Pollution Control Financing Authority in the form of tax-exempt “green” bonds. CalPlant has been in default on some of its debt, and forbearance agreements will expire Oct. 13.
