Pacific Ethanol (PEIX) Enters Into Agreements With Socius To Satisfy $34.7 Million Of Outstanding Debt With Lyle

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09:38:59 am on March 8, 2010

Pacific Ethanol just announced that it will be partnering with Socius CG II, Ltd. to satisfy $34.7 million of outstanding debt with Lyles United LLC and its affiliate Lyles Mechanical Co. Under the agreement between the 3 companies, Lyle has agreed to sell the debt to Socius in $5 million segments.In exchange, Pacific Ethanol will provide Socius with free-trading shares of the Company’s common stock. These shares will be provided at a 20 percent discount based on the volume weighted average price of the Company’s common stock over the 5-day trading period immediately following the date when the shares are initially issued.  However, Pacific Ethanol states that Socius will not be given any more than 9.99% of the total number of Pacific Ethanol shares that are outstanding.

In a press release, Pacific Ethanol CEO Neil Koehler commented on the agreements:

“We are pleased to have Socius as a new financial partner as we pursue our mission to be a leading producer and marketer of low carbon renewable fuels. This transaction supports our strategy to reduce debt, efficiently operate our production assets, and lower expenses. We believe this puts the Company in a stronger financial position to complete the reorganization of our ethanol plant subsidiaries currently the subject of Chapter 11 proceedings.”

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