Ethanol maker Aventine Renewable Energy Holdings, Pekin, Ill., says this week that it has defaulted on some debt payments and could be seeking Chapter 11 bankruptcy protection, according to wire service reports.
Shares for the company fell to 12 cents on the news, and the company reports it is working to raise more capital. In addition, it is seeking equity financing or a buyer for all or part of the company, but will choose bankruptcy if those efforts fail.
VeraSun, a larger ethanol maker, slipped into bankruptcy last fall. The challenge is shrinking ethanol margins as gasoline prices have fallen. And despite the renewable fuel standard, the price for the renewable fuel hasn't kept pace with production costs.
The company reported a fourth-quarter loss of $36.9 million compared to a profit of $3.3 million a year earlier. The company reports it does not have the cash to make a $15 million interest payment, or to pay more than $24 million it owes a builder for plant construction. Sales at the company rose $537.2 million.