US Pacific Ethanol subsidiaries expect to exit bankruptcy in Q2

29 March 2010 15:27  [Source: ICIS news]

HOUSTON (ICIS news)--Bankrupt subsidiaries of Pacific Ethanol – which control the company's four ethanol facilities – have filed a plan of reorganisation and should emerge from bankruptcy near the end of the 2010 second quarter, the US producer said on Monday.

The proposed plan provides up to $35m (€25.9m) in a new line of credit to support plant operations, while restructuring $293.5m of secured debt to a combination of equity and $115m of secured and subordinated debt, the company said.

Ownership of the plant subsidiaries would be transferred to a newly formed holding company owned by the lenders.

Pacific would then continue to market the ethanol produced by the plants through marketing subsidiaries Kinergy Marketing and Pacific Ag Products, it said. Those subsidiaries were not included in the bankruptcy filing.

“We believe the combined companies will be well positioned to continue as the leading producer and marketer of low carbon renewable fuels in the western United States,” Pacific CEO Neil Koehler said.

Pacific’s subsidiaries filed for bankruptcy protection in May 2009. The four facilities have a combined ethanol production capacity of 220m gal/year (833m litres/year).

Shares of the company dropped sharply on the news, falling 32 cents, or 16.1%, to $1.67/share in early-morning trading on the New York Stock Exchange.

($1 = €0.74)

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By: Ben DuBose
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