In March 2009, the five ethanol-producing plants owned by a subsidiary of Pacific Ethanol, Inc. PEIX.q filed for bankruptcy protection. The plants exited bankruptcy in June 2010, under ownership of several banks.
Pacific staffed, managed, and operated the plants for a fee, and marketed the products under a profit-sharing agreement. Pacific also had an option to purchase up to 25% of the plants for a price up to $30 million. Pacific’s problem was that it had almost no cash.
Now, some of the company’s institutional investors have agreed to purchase $35 million in senior convertible notes, to put Pacific back on its feet. Pacific will also sell its minority interest in another ethanol producer for $18.5 million, and use $23.3 million of the $53.3 million in total proceeds to buy 20% of its previously owned plants. The company will also use $17 million to retire debt, and keep $10 million in cash reserves
Now, some of the company’s institutional investors have agreed to purchase $35 million in senior convertible notes, to put Pacific back on its feet. Pacific will also sell its minority interest in another ethanol producer for $18.5 million, and use $23.3 million of the $53.3 million in total proceeds to buy 20% of its previously owned plants. The company will also use $17 million to retire debt, and keep $10 million in cash reserves
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