Aventine Renewable Energy Holdings Files for Chapter 11 Bankruptcy
PEKIN, IL --- Aventine Renewable Energy Holdings Inc., a producer of ethanol and related by-products, announced that the company and its subsidiaries have filed for Chapter 11 bankruptcy protection.
The company and certain holders of its 10.0 percent senior unsecured notes have agreed to a secured debtor-in-possession (DIP) term loan totaling $30 million that will enable the company to continue ethanol production operations.
Aventine Renewable Energy Holdings cited the ethanol industry's current poor operating margins as a result of supply exceeding existing demand.
"Ethanol demand has been negatively affected by low gasoline prices which have all but eliminated the discretionary consumption of ethanol," the company said. "Ethanol demand has also been negatively affected by refiners and blenders using excess renewable identification numbers ("RINS") to help meet their renewable fuels standard obligations instead of purchasing actual gallons of ethanol."
"We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential investors, and definitively resolve our debt issues," said Ron Miller, Aventine's president and CEO.
"The ethanol industry has sound long-term prospects, and we anticipate a strong rebound as the government-imposed biofuels mandate continues to increase and the supply of excess RINS are consumed," Miller added. "We are taking steps to ensure our business will be ready when the current markets turn up again. The vast majority of our suppliers will not see any disruptions in their business dealings with us."