On Thursday the U.S. Bankruptcy Court ruled that VeraSun Energy has been approved for debtor-in-possession financing totaling $196.6 million. Subject to certain conditions, that will include 93.6 million in incremental financing to fund operations at several ethanol production facilities. Also, $25 million of the financing total is represented by loans to VeraSun made on an interim basis as secured notes that are due in 2012.
The remaining $103 million will be used to refinance prepetition loans that had been made by the note holders who participated in the DIP financing. This DIP financing matures on Nov. 3, 2009.
"The DIP financing will allow us to focus on running the business while undergoing the restructuring process as part of addressing VeraSun's long-term future," said Don Endres,
VeraSun's chief executive officer.
VeraSun also requested the right to reject certain corn contracts for delivery at idled facilities through December, which was granted by the Court. The Court was also informed that VeraSun plans to reject contracts at other plants through Jan. 31, 2009 and for six plants that are not expected to be in operation during that time until Jan. 15, 2009. Farmers had been asking for some certainty on the status of their corn contracts and this action will allow them to move forward in remarketing their corn.
VeraSun filed Chapter 11 Bankruptcy on Oct. 31, 2008 along with 24 of its subsidiaries. All cases are being handled by the U.S. Bankruptcy Court of Delaware . For more information visit www.verasun.com.