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Bankruptcy allowed PEIX to get rid of $290 Million in Debt.



January 04, 2011 – Comments (2) | RELATED TICKERS: PEIX , FAN , ERY

6 months after exiting BK , PEIX re-starts its 60 Million gallon Low Cabon Fuel plant in California.

Pacific Ethanol exits bankruptcy

Sacramento Business Journal - by Ron Trujillo Date: Wednesday, June 30, 2010, 9:11am PDT - Last Modified: Wednesday, June 30, 2010, 12:14pm PDT

Read more: Pacific Ethanol exits bankruptcy | Sacramento Business Journal


Pacific Ethanol Inc.’s holding company and four wholly-owned subsidiaries exited bankruptcy Tuesday, ending several months of court hearings and negotiations.

Investors cheered the financially leaner Pacific Ethanol (Nasdaq: PEIX). The company’ shares soared 49 percent in early-morning trading Wednesday, gaining 23 cents to 69 cents.

The Sacramento-based company — a major producer and marketer of renewable fuels, with plants from Madera to Burley, Idaho — eliminated about $290 million in debt and other liabilities with the bankruptcy. The company’s plant subsidiaries are owned by a new holding company, Pacific Ethanol Holding Co.

However, Pacific Ethanol will continue to manage and operate the holding company under a fee and profit-sharing agreement with the new owners. Secured lenders approved the plan this month.

Pacific Ethanol has the option to purchase a 25 percent interest in the holding company for $30 million in cash, which must be exercised within 90 days — basically the end of September.

“Thanks to the dedicated work of our employees and the cooperation of our lenders who have achieved this important and positive outcome,” said Neil Koehler, president and chief executive officer of Pacific Ethanol. “We believe our business is well-positioned for growth.”

Pacific Ethanol — a one-time darling for the ethanol industry and with investors, even gaining a hefty investment from Microsoft Corp. chairman Bill Gates — will have term debt of $50 million with a $15 million line of credit, which could increase to $35 million.

Pacific Ethanol, the parent company, did not file for bankruptcy protection. The company, founded by former California Secretary of State Bill Jones and started in Fresno in 2003 before moving to Sacramento four years ago, has battled declining demand for ethanol and higher prices for product that makes the fuel in recent years.

But the outlook has improved during the past several months.

In January, the company resumed production at its 60 million-gallon-a-year facility in Burley, Idaho. Pacific Ethanol suspended production of ethanol at the plant in February 2009 because of unfavorable market conditions. Last year, Pacific Ethanol halted production at three of its four plants — in Burley, Madera and Stockton. Only the plant in Boardman, Ore., remained operating.

Combined, the plants have the capacity to produce 200 million gallons annually, according to a company quarterly report. In 2008, before the plants were idled, Pacific Ethanol produced 40 million gallons of ethanol in California, according to the California Energy Commission.

“With the California plants capable of producing the lowest carbon ethanol in the United States, we are now focused on a plan to restart these facilities to provide much-needed ethanol to meet California’s low-carbon fuel standard,” Koehler said in a news release.

Read more: Pacific Ethanol exits bankruptcy | Sacramento Business Journal

2 Comments – Post Your Own

#1) On January 04, 2011 at 12:06 PM, IBDvalueinvestin (98.35) wrote:

Maybe I should open a business , buy all the plants and equipment  with $290M in loans and then file for BK.

I just love it how companies con the system. 

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#2) On January 05, 2011 at 12:25 AM, Option1307 (30.65) wrote:

+0.10 for charity! :)

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