Utah's Raser Technologies files Chapter 11
Raser Technologies Inc., a Provo geothermal-energy developer, is seeking bankruptcy protection with a restructuring agreement worked out with bondholders and secured creditors.
The company listed $107.8 million in debt and $41.8 million in assets as of Dec. 31, in Chapter 11 documents filed Monday in U.S. Bankruptcy Court in Wilmington, Del. Nineteen affiliates also sought court protection.
Raser is a renewable energy company focusing on geothermal power development but has had problems making its technology work. The company has one operating plant in Utah and another eight early and development stage projects in Utah, New Mexico, Nevada and Oregon.
"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 ensure that the company will be in a position to continue its operations," the company said in a statement. Business operations won't be affected by the bankruptcy, said CEO Nick Goodman.
The company hasn't recorded a profit since it began posting its results in the quarter ending March 31, 2001, according to data compiled by Bloomberg News. Raser's shares have been suspended from trading on the New York Stock Exchange and are listed on the Over-the-Counter Bulletin Board.
The company's sole operating plant near Beaver, named Thermo No. 1, has a power generation capacity of 10 megawatts. The City of Anaheim, Calif., agreed in 2008 to buy 7 megawatts of the generated electricity for 20 years. That's enough to power 1,000 homes, according to Steve Sciortino, an assistant general manager of the city's utilities department.
He said Raser officials have been in touch and "quite candid with us" over the financial difficulties. "That's one of the reasons why we like them."
As the city moves to increase its supply of renewable power over the next several years, "if they can get additional power to us, we'll consider them." Raser provides 20 percent of the city's renewable portfolio and 1.5 percent of Anaheim's total supply.
Raser said in July that it was considering selling an equity stake in the project to finance installation of larger, more efficient turbines, after it failed to perform up to expectations. Thermo uses 250-kilowatt Pratt & Whitney PureCycle technology, instead of multimegawatt turbines that geothermal plants traditionally use.
Last week, Raser said it had not completed debt payments with the lenders for Thermo, according to a regulatory filing.
All of Raser's equity will be wiped out under the proposed restructuring, according to the statement. The company will borrow $8.75 million from two bondholders to help fund operations during the turnaround.
The Salt Lake Tribune contributed to this story.