Verenium could have jhad difficulty continuing as a company, its auditors say in a report from Reuters yesterday and carried in the UK’s Guardian Business Feed.The same report says Aventine may need to take Chapter 11 bankruptcy protection.
Key points from the Reuters report:
Verenium’s outside auditor, Ernst & Young, saidin a U.S. Securities and Exchange Commission filing that thecompany’s working capital deficit of $23.8 million andaccumulated deficit of $622.6 million as of Dec. 31 “raisesubstantial doubt about its ability to continue as a goingconcern.”
While Aventine said it didnot have the cash to make a $15 million interest payment dueApril 1 or the $24.4 million it owes builder Kiewit Energy Co. Kiewit built some ethanol-producing plants for Aventine.
Oil major BP has a stake in Verenium and it is not yet clear whether the firm would be prepared to step in and give addtional funding to Verenium. However the Reuters story relates to the year ending in December 2008. In February 2009 BP injected $45m into a joint venture with Verenium. The press office is looking into it for me.
How much of these difficutlies is down to a lack of integration along the supply chain from field to pump and how much is down to the difficutly in bringing new technologies to the market cost effectively it is hard to say. But this story points up the difficulties that I’m sure many companies face across the sector.
UPDATES include making it clear that Verenium is in a joint venture with BP and that BP has invested cash in the jv in the period after E&Y gave its opinion. For BP’s response see Verenium: BP responds.