The mass-timber producer says funding dried up as a result of the pandemic.
Katerra, the mass timber and construction services provider, has filed for bankruptcy.
The Menlo Park, Calif.-based company reported that it has filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
The company has also reported that it has secured commitments for $35 million in debtor-in-possession financing from SB Investment Advisers Limited to fund operations during the Chapter 11 process.
In a press release issued by Katerra, the company said “the rapid deterioration of the company’s financial position” is the result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business
One of Katerra’s largest lenders, SoftBank Group Corp.’s $100 billion Vision Fund, recently filed for bankruptcy protection in the U.S. Additionally, Softbank-backed Greensill Capital filed for insolvency protection three months ago after lending millions to Katerra.
“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 U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process.
Katerra said the company is moving ahead with several active construction projects following a review of its strategic alternatives.
In 2019, Katerra opened a 270,000-square-foot high-volume cross-laminated-timber factory in Spokane, Wa.