Corbion Wins Court Approval to Buy TerraVia for $20 Million

5:03 pm ET September 15, 2017 (Dow Jones) Print
By Peg Brickley

Netherlands-based biotechnology company Corbion NV has won approval to pay $20 million for TerraVia Holdings Inc., once a highflying pioneer that promised to transform algae into fuel.

Judge Christopher Sontchi approved the sale at a hearing Friday in TerraVia’s bankruptcy case. Approval from the judge clears the way for Corbion to add TerraVia’s algae-based technology to a portfolio that includes products to prevent food spoilage and chemicals derived from sustainable sources.

TerraVia’s aspirations to become a biofuels giant never panned out. The San Francisco-area company struggled to get its algae-based consumer business into successful commercial operation.

After going public in 2011, TerraVia stacked up losses, ringing up an accumulated deficit of $734 million as of the end of March, according to a filing with the Securities and Exchange Commission. TerraVia’s stock was delisted after the Aug. 2 bankruptcy filing.

Once known as Solazyme and backed by Sir Richard Branson and other advocates of clean technology, or clean tech, TerraVia gained ground as a promising startup intent on delivering biofuel made from algae. It also became a food, nutrition and specialty-ingredients company, developing algae-based products for consumer use. Last year, TerraVia switched to focus on the food and consumer lines of business.

By the time it filed for bankruptcy in August, TerraVia was low on cash, having failed to rapidly commercialize and profit from its algae-based food product lines. It had a “stalking horse” offer from Corbion for the bulk of its business, and other contenders that showed up at a bankruptcy auction failed to beat Corbion’s offer.

TerraVia raked in significant tax dollars in its clean tech heyday, a factor that snarled Friday’s sale hearing in the U.S. Bankruptcy Court in Wilmington, Del. The U.S. government backed Solazyme’s technology with contracts and grants, and the company did work for the Energy Department and the Defense Department.

Justice Department lawyer Ellen Slights protested that it was difficult for the government to make sure contracts that implicate U.S. federal interests weren’t on the list of assets being sold.

Corbion had agreed to leave behind any U.S. government-related contracts, but Ms. Slights said sorting through TerraVia’s research and development pacts to ascertain whether federal interests were tied up in them was a challenging task. TerraVia inserted a clause providing that any agreement with federal interest wouldn’t be included in the deal.

Last year, TerraVia sold 80% of its Algenist cosmetic and skin-care brand to Tengram Capital Partners for $18.8 million, plus stock. At the auction, Tengram picked up the 20% TerraVia still owned, for $900,000.

Sale proceeds will fall far short of the more than $170 million TerraVia owes bondholders. Once the sales are closed, TerraVia will file a chapter 11 plan setting out how its assets will be distributed among creditors.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

September 15, 2017 17:03 ET (21:03 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.






 

TerraVia Files for Bankruptcy – Announces Sale of Substantially All of Its Assets Subject to Competitive Bidding Process

TerraVia Holdings Files for Bankruptcy; Announces Sale of Substantially All of Its Assets Subject to Competitive Bidding Process


3:59 am ET August 2, 2017 (Benzinga) 

TerraVia Holdings, Inc. (NASDAQ: TVIA) announced today that it has entered into a “stalking horse” stock and asset purchase agreement with Corbion N.V., a Netherlands-based global leader in food ingredients and biobased technologies, to acquire substantially all of TerraVia’s assets in a sale process under Section 363 of the Bankruptcy Code.

The purchase agreement provides TerraVia with a binding bid of $20 million in cash along with the assumption of certain liabilities, which is subject to higher or otherwise better offers. As part of the transaction, Corbion will be assuming the ongoing financial obligations of the business and its joint venture ownership, therefore the total financial commitment is expected to be in excess of the cash purchase price. Through this proposed transaction, TerraVia employees, who bring with them a wide range of highly valued skills and expertise, together with its customers, have an opportunity to benefit from joining a global leader in its markets.

To facilitate its competitive transaction process, TerraVia and its wholly owned U.S. subsidiaries have filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) under the Case number 17-11655. Additional information can be found at http://www.kccllc.net/TerraVia.

In addition, TerraVia also announced that it has received a commitment for debtor-in-possession (DIP) financing from holders of approximately 63% of the outstanding principal amount of its senior unsecured convertible notes. The DIP financing will be used to finance the working capital needs of TerraVia’s business through the completion of the sale transaction and to support payments to vendors for post-petition purchases in the ordinary course.

The DIP financing announced today provides the necessary financing to support continued operations and TerraVia’s ability to service customer demand, while the Section 363 bankruptcy restructuring process provides the tools to execute an expedited and orderly strategic transaction. This process will create a level playing field for all interested bidders to compete to provide the highest or otherwise best offer for certain or all of TerraVia’s assets.

Pursuant to section 363 of the Bankruptcy Code, TerraVia intends to implement bidding procedures to allow other qualified bidders the opportunity to submit bids through a court-supervised process to purchase certain or all of the assets being sold.
TerraVia anticipates that a sale will be completed within 60 to 90 days.
Rothschild Inc. is acting as TerraVia’s financial advisor and investment banker to lead the sales process under the bid procedures and Davis Polk & Wardwell LLP is acting as restructuring and corporate counsel to TerraVia.


For more information > http://www.kccllc.net/TerraVia