Sunday, February 1, 2009

Ethanol | Greater Ohio Ethanol

Greater Ohio Ethanol - Another Reason to Abandon the Ethanol Debacle

The failure of the ethanol initiative is again unveiled as the Greater Ohio Ethanol company can't find a buyer that could justify the price and debt the company is attempting to command and owes.

Costs for the ethanol plant were an astronomical $150 million, without anything but a pathetic government mandate to force ethanol as a biofuel on the public. Even with taxpayer subsidies the biofuel can't even come close to producing a profit.

Unless Greater Ohio Ethanol is basically given away, it's not even worth the trouble. Even then it's doubtful it would be worth the headache of an inevitable shutdown. If someone takes this responsibility on, they deserve what they get, as it's been a losing proposition from the beginning.

While the ethanol plants' creditors are obviously trying to patch up as much damage to their investment as they can, they have absolutely no foundation to stand on, the reason deal after deal has been turned down.

So far two companies have made bids for Greater Ohio Ethanol, but they've both been rejected. Both companies have stakes in Greater Ohio Ethanol, as Paladin Capital Group of Washington, D.C. provided the equity to build the Lima plant, and NextGen Ethanol owns two of the ethanol plants currently operating.

Bills continue to mount in spite of the failed bids, and it'll keep getting worse the longer the bankruptcy proceedings last, as they're costly as well. There are still operational costs at the ethanol plant, along with construction bills that have yet to be paid. What a mess the misguided ethanol industry has become, and Greater Ohio Ethanol is a cover story to emphasize the debacle.

With creditors anxiously looking on, they've filed a motion to convert the Chapter 11 bankruptcy to a Chapter 7, as those unsecured debtors are in a secondary position, and probably will receive nothing under the Chapter 11. At this time a sale of the company would only benefit the senior, secured lenders. Of course the unsecured debtors knew this when they signed on, so it's nothing but their own fault for taking the risk.

Lima, Ohio is finding out the hard way, along with much of the midwest, that ethanol as a business is basically fools gold, and it's going to remain that way. The Greater Ohio Ethanol company, along with the numerous other ethanol companies, is a narrative showing ethanol as a biofuel needs to be abandoned as a viable alternative. The numbers just don't add up, and it's a waste of billions in taxpayer dollars.

1 comment: said...

Thank you for staying on top of this. I put together a brief list of recent bankruptcy filings and mentioned your blog. Here it is.