Pacific Ethanol cuts debt, says ethanol units set to exit bankruptcy

09 June 2010 22:47  [Source: ICIS news]

HOUSTON (ICIS news)--US ethanol maker Pacific Ethanol said on Wednesday it had reached a deal with its lenders that would eliminate some $290m (€244m) in debt, while giving it the option of ownership in a new holding company.

The holding company would incorporate Pacific Ethanol’s four subsidiaries, which filed for bankruptcy protection in May 2009.

The deal was expected to go into effect by the end of June, Pacific said.

The subsidiaries control Pacific’s four bio-refineries that have combined ethanol capacity of 220m gal/year (833m litres/year).

Under the agreement, the ethanol maker would have an option to purchase up to 25% of the total ownership interests in the new holding company for up to $30m.

The new holding company would have term debt of $50m with a working capital line of credit of up to $15m, which could be increased to $35m under the terms of the credit facility.

($1 = €0.84)

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By: William Lemos
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