Florida Agency Denies Bond Extension for BioNitrogen
BRADENTON, Fla. – As BioNitrogen Holdings Corp. navigates Chapter 11 bankruptcy, a rural Florida county has refused to extend the company's $300 million private-activity bond allocation.
The Hendry County Industrial Development Authority board voted 3-1 to deny a one-year extension of the PABs last month, after expressing concern about the project's delay and uncertainty about the company's future, a county official said.
BioNitrogen's financing agreement with the county expired Dec. 31, two years after it was first approved.
The company did not respond to a request seeking comment about losing the borrowing authority, nor has the denial been reported on the firm's website.
BioNitrogen filed for bankruptcy on Nov. 3 in the U.S. Bankruptcy Court for the Southern District of Florida, after it was found in default on a loan to which the firm had pledged its intellectual property for plants that convert agriculture and forestry biomass into urea fertilizer.
The cleantech company broke ground on what was to be its start-up project in May 2014, promising Hendry County that it would create 55 full-time jobs and 250 jobs during construction.
Hendry has had the highest unemployment rate of any county in the state, including an 8.3% jobless rate in November, according to the state Department of Economic Opportunity. The unemployment rate for Florida was 4.8%.
Hendry County's plant never materialized, and the delay was an issue for the IDA, the county official said.
The absence of a business plan the county requested two years ago and the bankruptcy also concerned authority board members.
Additionally, the Hendry County Commission voted unanimously to recommend against extending the bond agreement, according to backup information for the IDA meeting.
The backup information also said that the commission was attempting to terminate an agreement with the Florida Department of Transportation, which had agreed to provide an $850,000 grant to install a turn lane and make other road-related improvements for the BioNitrogen plant.
"Rather than face default as the grant is contingent upon construction activities by BioNitrogen," the county said it was working to end the grant agreement without incurring any penalties, county documents said.
In a presentation to the Hendry County IDA in Dec. 16, BioNitrogen said that it filed for bankruptcy because previous management borrowed money with covenants and promises that the company could not meet.
The presentation also said that too much time had been spent exploring additional locations to build, rather than focusing on building the first facility in Hendry County.
The bankruptcy was also filed because a court found that BioNitrogen in default of a loan to AnnonConsulting, and the company's intellectual property had been pledged to secure the loan, the presentation said.
BioNitrogen recently asked the bankruptcy court for relief from the automatic stay in order to proceed with an appeal of the loan default decision.
BioNitrogen amassed nearly $2 billion in bonding authority from Louisiana and Florida over the last few years. None of the bonds have been issued.
In north Florida, Taylor County guaranteed at $5 million loan and is now involved in the bankruptcy proceeding.
The Taylor County Industrial Development Authority agreed to issue $300 million of private activity bonds for a BioNitrogen plant. The authority did not respond to a request for comment.
In Louisiana, the company planned to build five plants.
The Louisiana Local Government Environmental Facilities and Community Development Authority had agreed to issue the initial $300 million of bonds, but the volume cap allocation was returned to the state unused in early 2014, according to an executive order issued by Gov. Bobby Jindal.