Just months after VeraSun Energy filed for Chapter 11, another ethanol producing giant, Aventine Renewable Energy Holdings, Inc., Pekin, IL, along with its subsidiaries, have done the same.
In a news release today, Aventine reported that it and certain holders of its 10% senior unsecured notes have agreed to a first priority secured debtor-in-possession (DIP) term loan totaling $30 million that will enable Aventine “to continue to satisfy customary obligations associated with its ongoing operations.” Aventine reported that the DIP loan will provide it with new liquidity permitting it to maintain normal operations and allow the company and its creditors “to jointly plan for the future.”
Ethanol demand has been negatively impacted by low gas prices and by refiners and blenders using excess renewable identification numbers (RINs) to help meet their Renewable Fuels Standard (RFS) obligations instead of actually purchasing ethanol.
Ron Miller, president and CEO, Aventine, said that the ethanol industry has “sound long-term prospects.” He also said that the company anticipates a strong rebound as the RFS mandate continues to increase and the supply of excess RINs are consumed. “The vast majority of our suppliers will not see any disruptions in their business dealings with us,” he added.