Four Rivers BioEnergy negotiates forbearance on convertible debentures

Company agrees to phased realization of assets, payments to holder

By Devika Patel

Knoxville, Tenn., Aug. 28 - Four Rivers BioEnergy Inc. negotiated a forbearance agreement with the holder of its original issue senior convertible debentures on Aug. 24, according to an 8-K filed Tuesday with the Securities and Exchange Commission. The company announced the default on Aug. 2.

The investor agreed to forebear with the default if the company agreed to begin a phased realization of the assets on which the debentures are secured. The company agreed to make payments out of the sales proceeds to the debenture holder to reduce the amount owed under the debentures.

The company said that asset realization plans have been developed in contemplation of a possible equity investment, which the company is in advanced-stage discussions for, so as to retain the assets that Four Rivers considers to be core to its waste-to-energy business plan and that are also considered by the potential investor to be central to its investment decision.

If the debentures are not fully redeemed by their due date on Dec. 31, 2012 from proceeds of the asset realization plan or the potential equity investment, any unpaid balance will start to accrue interest at 18% and will be payable upon demand.

Four Rivers is a London-based development-stage company focused on building a network of bio-energy plants in the United States and the United Kingdom.

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