USA Springs plan up to the court

USA Springs is on its way to completing its controversial water bottling plant in Nottingham — all it needs is approval of a reorganization plan by the Bankruptcy Court in Manchester.Under the plan, the company — which will remain under the control of its president, Francesco Rotondo — would borrow $60 million to pay off its creditors and complete the job.Rotondo and his backers have spent $17 million since Rotondo formed the company in 1997, but it took nearly a decade to overcome the opposition of residents to state and federal permits to withdraw more than 300,000 gallons of groundwater a day in order to bottle it and sell it, primarily to entities overseas.In 2008, the company ran out of money and filed for Chapter 11 bankruptcy, with the 176,000-square-foot bottling facility about 45 percent complete, the bottling equipment half-installed, and the architectural design three-quarters completed.But the plant’s three wells are drilled and site engineering finished. In addition, there are what the company calls “preliminary” contracts and letters of intent totaling $650 million in place with the International Organization for Diplomatic Relations in Malta, Martini & Rossi and the presso Hotel Escuela, both in Italy.USA Springs insists that all of its permits are still in place, although opponents say they have lapsed.According to bankruptcy filings last week, under the reorganization Malom, a Swiss firm, would issue $60 million in structured notes over a five-year period, provided that an unnamed USA Springs insider provides up to $1.2 million up front, and eventually to be paid back.According to the filing, the developed land would be worth anything from $22 to $43 million, with water rights worth approximately $100 million.The money would be used to pay off creditors, the largest of which is the mortgage holder, Roswell Commercial, with $9.85 million as well as other secured creditors, who are owed a total of $1.6 million, some $400,000 in taxes and $3.7 million for unsecured creditors, among other debts.The filing also says, “It is anticipated that, post-confirmation, the Board of Directors will include Francesco Rotondo (“Mr. Rotondo”) (current president and Director), and others as approved by Malom and Mr. Rotondo.”USA Springs has met stiff resistance over the years from residents who charge that Rotondo and allies proposed drawing more water than the aquifer can hold, at the expense of local residents, to make a profit selling water out of the country. They also charge that the company optimism about the worth of its assets, and permits is wildly inflated.Rotondo has attributed at least some of that opposition to anti Italian prejudice, and that acrimony continued somewhat in the filing. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

Categories: News