Pacific Ethanol units joins others in bankruptcy court

By Matt Andrejczak, MarketWatch

SAN FRANCISCO (MarketWatch) -- Pacific Ethanol Inc., the largest West Coast producer of ethanol, said its subsidiaries filed for Chapter 11 bankruptcy protection Monday, the latest in a wave of companies dragged down by poor conditions in the U.S. ethanol market.

Subsidiaries that own four ethanol plants in California, Oregon, and Idaho filed for bankruptcy in Delaware court, Pacific Ethanol /quotes/comstock/15*!peix/quotes/nls/peix (PEIX 0.45, +0.02, +4.65%) said. The company itself and two marketing units, Kinergy Marketing LLC and Pacific Ag Products LLC, didn't file for protection from creditors.

"We have worked well with our creditors to develop a plan that we believe allows us to continue operations and meet our commitments to our customers and vendors," said Pacific Ethanol CEO Neil Koehler in a statement.

Pacific Ethanol said WestLB AG and other lenders have agreed in principle to up to $20 million in debtor-in-possession financing. Used to keep companies afloat during the bankruptcy process, the financing must be approved by the court.

The Sacramento, Calif.-based ethanol producer lost $23.9 million for the period ended March 31, compared to a net loss of $35.2 million in the year-earlier period, while its average sales price per gallon of ethanol fell 28%, to $1.65 from $2.30.

There are at least 10 other ethanol producers in bankruptcy, including VeraSun Energy, Aventine Renewable Energy, Renew Energy and Cascade Grain Products LLC.

http://www.marketwatch.com/story/pacific-ethanol-joins-others-in-bankruptcy-court