Pacific Ethanol (Nasdaq:PEIX) announced recently it is reorganizing the company in order to bring its four production subsidiaries out of bankruptcy.
They opened up the Magic Valley plant located in Idaho earlier in the year, and have plans to open up two more idled ethanol plants soon.
Lenders have already approved of the reorganization plan, and the two idled plants, which are both located in California, may resume production by the end of June.
Pacific Ethanol will be allowed to acquire up to 25 percent of the overall ownership in the new holding company, which has the subsidiaries transferred to it. The cost will be up to $30 million in cash.
Two plants wholly owned by Pacific are now operational - one in Boardman, Oregon, and the other in Burley, Idaho.
Combined they can produce up to 100 million of ethanol annually.
Showing posts with label Ethanol Bankruptcy. Show all posts
Showing posts with label Ethanol Bankruptcy. Show all posts
Thursday, June 10, 2010
Saturday, February 7, 2009
Ethanol Producer VeraSun Energy Finds Sucker
There's always a sucker to find to sell a worthless, and less than worthless piece of business property to, and VeraSun Energy Corp. surprisingly has done just that in clueless Valero Energy Corp., which will pay VeraSun Energy $280 million for the privilege of taking fiver VeraSun plants off their hands.
Boy am I glad I don't own shares in Valero Energy, as this will pull them down in a big way, as the hapless ethanol prodcution industry collapses around it. I would have thought VeraSun would have paid that much just to get rid of them.
Now that the company has received and agreed to a deal, per terms of their bankruptcy, tehy now must hold an auction to give other companies a chance to make rival bids. Anyone else dumb enough to do this out there?
If perchance any other qualifying bids are offered, an auction will be held on March 16 to battle over the VeraSun corpse. Bidders have until March 13 to submit qualifying bids.
VeraSun is attempting to sell all 16 of their existing of its ethanol plants.
Along with the acquisition price of $280 million, the deal would be plus value of inventory and certain pre-paid expenses, for production facilities in Aurora, South Dakota; Charles City, Fort Dodge, and Hartley, Iowa; and Welcome, Minnesota; and a site under development in Reynolds, Indiana.
Under terms of their Chapter 11 bankruptcy, the court also gave Verasun permission to sell seven of the eight ethanol plants they acquired from U.S. BioEnergy last year (smart company to get out at the right time), although none of those are included in the Valero energy deal.
VeraSun CEO Don Endres said that taking into consideration the terrible conditions of the ethanol industry and supposedly difficulty in getting credit (who would give it to them in the best of conditions), this seems to be the best avenue to take.
The truth is the ethanol industry is a disaster and shouldn't be part of the alternative fuel scene in any form. VeraSun is the best example of that, as they would be completely destroyed if someone didn't come buy and pick up the shattered pieces.
I don't know what Valero Energy executives are thinking, but this makes no sense. If I was a shareholder I would be screaming bloody murder and lining up lawyers. This is an outrage that will push Valero Energy's value down for years to come. There just isn't any upside for this at all.
VeraSun should have simply been allowed to fold up and fail. But this is being pushed behind the scenes by government officials who know the truth would come out more into the light about the misguided fuel mandate involving ethanol as a biofuel. Opposition is growing as they attempt to salvage one of the more unpopular government hand outs ever.
All the operations and production facilities are being attempted to be sold by VeraSun so they don't make the government fiasco look so bad. I'm really surprised anyone with an ounce of brains would have taken on this huge debt and was willing to throw money down a bottomless rabbit hole.
Managing the sales process and acting as a financial adviser for VeraSun is Rothschild Inc, while advising Valera is Credit Suisse.
Someone is finally doing something right for VeraSun, too bad it wasn't before they entered into the ethanol industry at all, and were decimated and humiliated as they couldn't even make money with a taxpayer subsidized industry. I can see Valero Energy getting into shareholder trouble in the future as the weight of adding this to their bottom line pummels shareholder value in the company.
Boy am I glad I don't own shares in Valero Energy, as this will pull them down in a big way, as the hapless ethanol prodcution industry collapses around it. I would have thought VeraSun would have paid that much just to get rid of them.
Now that the company has received and agreed to a deal, per terms of their bankruptcy, tehy now must hold an auction to give other companies a chance to make rival bids. Anyone else dumb enough to do this out there?
If perchance any other qualifying bids are offered, an auction will be held on March 16 to battle over the VeraSun corpse. Bidders have until March 13 to submit qualifying bids.
VeraSun is attempting to sell all 16 of their existing of its ethanol plants.
Along with the acquisition price of $280 million, the deal would be plus value of inventory and certain pre-paid expenses, for production facilities in Aurora, South Dakota; Charles City, Fort Dodge, and Hartley, Iowa; and Welcome, Minnesota; and a site under development in Reynolds, Indiana.
Under terms of their Chapter 11 bankruptcy, the court also gave Verasun permission to sell seven of the eight ethanol plants they acquired from U.S. BioEnergy last year (smart company to get out at the right time), although none of those are included in the Valero energy deal.
VeraSun CEO Don Endres said that taking into consideration the terrible conditions of the ethanol industry and supposedly difficulty in getting credit (who would give it to them in the best of conditions), this seems to be the best avenue to take.
The truth is the ethanol industry is a disaster and shouldn't be part of the alternative fuel scene in any form. VeraSun is the best example of that, as they would be completely destroyed if someone didn't come buy and pick up the shattered pieces.
I don't know what Valero Energy executives are thinking, but this makes no sense. If I was a shareholder I would be screaming bloody murder and lining up lawyers. This is an outrage that will push Valero Energy's value down for years to come. There just isn't any upside for this at all.
VeraSun should have simply been allowed to fold up and fail. But this is being pushed behind the scenes by government officials who know the truth would come out more into the light about the misguided fuel mandate involving ethanol as a biofuel. Opposition is growing as they attempt to salvage one of the more unpopular government hand outs ever.
All the operations and production facilities are being attempted to be sold by VeraSun so they don't make the government fiasco look so bad. I'm really surprised anyone with an ounce of brains would have taken on this huge debt and was willing to throw money down a bottomless rabbit hole.
Managing the sales process and acting as a financial adviser for VeraSun is Rothschild Inc, while advising Valera is Credit Suisse.
Someone is finally doing something right for VeraSun, too bad it wasn't before they entered into the ethanol industry at all, and were decimated and humiliated as they couldn't even make money with a taxpayer subsidized industry. I can see Valero Energy getting into shareholder trouble in the future as the weight of adding this to their bottom line pummels shareholder value in the company.
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.
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.
Friday, January 16, 2009
VeraSun Energy Dumping More of its Plants - 7 More Put Up for Auction
As part of the bankruptcy court financing agreement, VeraSun Energy Corp. is going to auction off seven of its biorefineries.
Stuggling to survive, the company needs to raise about $12.3 million just to run its remaining plants and pay its workforce through April 30, according to its filing in a Delaware bankruptcy court.
Per the agreement, the auction will start on March 16 and close on March 31. I'm not sure anybody would want them even for free. It'll be interesting to see if there are any takers.
At this time only four of VeraSun's ethanol plants remain operating, with the rest shut down, desperately hoping the economy will turn around so they can start them up again. I think they're out of luck on that one.
Stuggling to survive, the company needs to raise about $12.3 million just to run its remaining plants and pay its workforce through April 30, according to its filing in a Delaware bankruptcy court.
Per the agreement, the auction will start on March 16 and close on March 31. I'm not sure anybody would want them even for free. It'll be interesting to see if there are any takers.
At this time only four of VeraSun's ethanol plants remain operating, with the rest shut down, desperately hoping the economy will turn around so they can start them up again. I think they're out of luck on that one.
Thursday, January 15, 2009
"Show Me Ethanol" Close to Filing Bankruptcy
Show Me Ethanol of Missouri is one step away from filing bankruptcy, as it has asked it shareholders for more funding via a capital call of $4,800 a share and a voluntary capital contribution.
If they can't raise the additional funds, the company will be forced to file for Chapter 11 bankruptcy.
Let it die!
If they can't raise the additional funds, the company will be forced to file for Chapter 11 bankruptcy.
Let it die!
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