June 10--Pacific Ethanol Inc., continuing its comeback, said today it had trimmed another $14.7 million off the debt load at its four production plants.
The Sacramento ethanol producer said it made a deal to purchase $14.7 million worth of plant debt from a lender. Pacific Ethanol paid $17 million for the IOU, a premium, although President and Chief Executive Neil Koehler said the lender agreed to a smaller premium than it was owed.
By absorbing the debt into the parent company, Koehler said Pacific Ethanol has effectively retired the loan. There's now $20.5 million worth of debt left on the four production plants, down from nearly $300 million when the company nearly spun out of control in 2009.
"We want to clean up the balance sheet once and for all and get it behind us," Koehler said in an interview.
In 2009, after ethanol prices collapsed, Pacific Ethanol ran short on cash and idled three of its four plants. All four plants were put into Chapter 11 bankruptcy reorganization.
The bankruptcy case ended with lenders forgiving about $200 million in debt but taking controlling interest in the plants away from Pacific Ethanol. Since then, the market has recovered, the plants have resumed production and Pacific Ethanol has gradually bought back controlling interest in the facilities. Today the company owns 91 percent of the equity in the plants.
Pacific Ethanol shares fell 5 cents, to $14.09, in morning Nasdaq trading.
(c)2014 The Sacramento Bee (Sacramento, Calif.)
Visit The Sacramento Bee (Sacramento, Calif.) at www.sacbee.com
Distributed by MCT Information Services