Six months after the state of Wyoming threw a lifeline to Gillette-based Atlas Carbon LLC on a $15 million loan, the commercial enterprise continues to struggle with repaying the debt.
The company is repaying interest only on the loan but not the principal, effectively putting the company in a tough financial spot as the balance still hovers close to $14.5 million after six years with hundreds of thousands of dollars in interest paid out just to keep the loan in “good standing,” according to data provided to Cowboy State Daily by the Wyoming Treasurer’s Office.
Earlier this year, the Wyoming State Loan and Investment Board (SLIB) ruled that Atlas Carbon defaulted on a $15 million loan first given to the company in 2018. Atlas Carbon was the first recipient of a loan from SLIB’s Economic Development Large Project Program, which began in 2014.
Before the board ruled on the loan in February, Atlas Carbon CEO Reza Hashampour argued that his company had made progress growing revenue to nearly $6 million in the past two years and was generally on the cusp of going from a research and development company to a commercial one.
In March, Atlas Carbon came up with a cash infusion from private investors to help get the company turned around and help it resume repaying its borrowed money from the state.
This is when the company, which has worked for about a decade to build a commercial enterprise in Gillette turning coal into activated carbon for filters needed to strip contaminants from water and air, made a payment of $436,656.70 to catch up on its overdue payments from last year.
As of Thursday, Atlas Carbon has continued to make its quarterly interest payments in full, $130,139.28 in May and $216,564.19 in August.
‘Good Standing’
“Since they have made good on the interest payments, they are considered to remain in good standing,” said Jeff Robertson, a spokesman for State Treasurer Curt Meier, who is one of the five state officials on the investment board.
The state loan and investment board is made up of Wyoming’s top five elected officials: Meier, Gov. Mark Gordon, Superintendent of Public Instruction Megan Degenfelder, Secretary of State Chuck Gray and State Auditor Kristi Racines.
While the company has paid interest on its $15 million loan at a rate of 5.83%, which went into effect in May and is locked until May 2027, the company hasn’t repaid any principal on its loan with the state of Wyoming, according to Robertson.
Robertson couldn’t say how much total interest and principal Atlas Carbon has repaid because the “amount is fluid, depending on when and how [many] payments they make each quarter.”
“Atlas remains committed to full repayment of the loan and the state continues to work with Atlas on repayment,” he said.
The Atlas Carbon loan matures in May 2028, meaning that the full $15 million in borrowed money must be repaid by then.
The principal, excluding the current interest rate, currently stands at $14,535,593.90, according to Robertson.
Robertson said “no lifeline” was given to Atlas Carbon to meet its financial obligations.
“Atlas Carbon has numerous contracts to provide activated carbon to public and private entities across the country, including cities, water treatment facilities and energy companies,” Robertson said.
Hashampour, who couldn’t be reached for comment, previously told Cowboy State Daily that he had advanced the company along on many fronts. In an interview this past spring, Hashampour boasted more than 40 clients to sell its products and has had conversations with international prospects from Poland to Colombia.
First Loan Recipient
Atlas Carbon has been held up as an example of developing other valuable products using Powder River Basin coal other than burning it to generate electricity.
Making the transition to commercialization has been tough, however.
In July 2019, Virginia Beach, Virginia-based management firm Polaris Asset Corp. was hired to bring Atlas Carbon to its next stage of growth.
Then two years ago, Polaris Chairman and CEO Hashampour stepped into the position as CEO of Atlas Carbon when the founder and principal backer of Atlas Carbon, former CEO Frank Levy, stepped aside to spend more time with his family.
Levy remains chairman of Atlas but stepped back from his day-to-day duties.
Levy couldn’t be reached for comment.
Pat Maio can be reached at pat@cowboystatedaily.com.
