US construction company with largest CLT factory in North America files for bankruptcy protection10 June 2021
A US construction services company which set up a US$150m mass timber (cross laminated timber – CLT) factory in 2019 has filed for bankruptcy.
Katerra filed voluntarily filed for relief under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, as the company takes steps to conduct a marketing and sale process to maximize value for its stakeholders.
Its CLT factory in Spokane Valley, Washington is the largest single-use CLT facility in North America, producing 30% of the current North American mass timber manufacturing capacity – two times any comparable manufacturer.
The 270,000ft2 facility has one of the largest CLT presses globally and has an annual production capacity of 185,000m3.
Katerra, founded in 2015, has secured commitments for US$35m in Debtor-in-Possession (DIP) financing from SB Investment Advisers (UK) Limited to fund operations during the Chapter 11 process.
“While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” said chief transformation officer Marc Liebman.
“Our multi-step action plan has rapidly evolved and includes consolidating US activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process.”
Back in December, 2020 Katerra CEO Paal Kibsgaard announced a recapitalisation of the business – which has become a US Top 5 multifamily builder by volume.
He said there had been “challenges and missteps”. Lightning-speed growth and a cost-intensive programme of investments and R&D resulted in Katerra at times becoming “overcommitted”.
“Accordingly, the company spent substantial amounts of investor capital while establishing and growing numerous businesses in parallel — ultimately more than we could fully develop and maintain all at once within this very capital-intensive industry.”
He said additional funding had been required to navigate the pandemic, which had resulted in added projects costs and delays.
It has also been reported that one of Katerra’s largest lenders, SoftBank Group Corp’s US$100bn Vision Fund, had recently filed for bankruptcy protection in the US.