Pacific Ethanol (PEIX) Whacked On Restructure Plan

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08:20:01 am on March 29, 2010

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Pacific Ethanol (PEIX) is down more than 20% in premarket trading after it was announced that its subsidiaries filed a reorganization plan with the bankruptcy court in Delaware in cooperation with its lenders.  The plan provides for up to $35 in new credit and restructures more than $400 million in debt.  In return, the lenders will own the subsidiaries which will be combined under a new holding company, but Pacific Ethanol is currently negotiating with lender to regain ownership.  The new company will continue to staff, manage and operate the plants.

PEIX believes the restructuring will provide the needed liquidity to continue to operate its ethanol plants.  CEO Neil Koehler commented: “The Plan will significantly improve the balance sheets of the Company and its Plant Subsidiaries by reducing debt and providing new working capital. We believe the combined companies will be well positioned to continue as the leading producer and marketer of low carbon renewable fuels in the Western United States. Working in cooperation with our lenders in filing this Plan, we are excited about the long term, strategic growth opportunities for the Company as the market for our products and services continues to expand.”

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