Synagro restructuring gets green light

The approval is the final step in a $480m deal between Carlyle and EQT.

A plan to restructure erstwhile Carlyle Group portfolio company Synagro Technologies has won creditor approval, effecting a $480 million sale of the bankrupt renewable energy company to EQT Partners.

EQT bought Synagro via its EQT Infrastructure Fund II in April. Synagro filed for Chapter 11 protection in order to restructure its debt. The 27-year-old company was the first acquisition for Carlyle Infrastructure Partners, which paid $772 million to tale Baltimore, Maryland-headquartered Synagro private.

Synagro, $500 million in debt, had obtained $30 million of debtor-in-possession financing to remain in operation. Under the restructuring plan, lenders will be repaid in full to the amount of $316 million, as will unsecured trade creditors, which are owed $16.9 million. Secondary lenders will get $45 million.

In addition, 1.2 percent of the remaining $60 million in unsecured debt is expected to be recovered. Synagro had estimated that $60 million would go unpaid.

Following its purchase by Carlyle in 2007, Synagro faltered in the wake of the global financial crisis (GFC), as spending on water and wastewater services decreased. Synagro is able to recycle municipal and industrial wastewater into fertilizer and biofuel.

Carlyle put Synagro in play in January, hiring investment bank Evercore Partners to shop the company. By the spring, the company had defaulted on its debt.

The EQT Infrastructure II fund closed in January on €1.9 billion.