Pacific Ethanol just announced that its Chapter 11 bankruptcy plan has been approved and its plants will soon be out of bankruptcy protection. The restructuring plan gets rid of t $290 million in debt. The four plants that PEIX owns will be transferred to a holding company owned by its lenders, but PEIX will continue to run them.

For up to $30 million, the plan also gives PEIX the option to purchase 25 percent  equity in “NEW PEH,” the holding company that will have ownership of the plants.

In a press release,  Neil Koehler, the Pacific Ethanol’s CEO and President commented on the news:

“Achieving a confirmed plan of reorganization is a significant milestone in our restructuring efforts. New liquidity and low debt levels provided by the plan support our efforts to optimize operations at the two facilities currently running, and as market conditions permit, resume operations at the two idled facilities. Holding an option to purchase an equity interest in the facilities at a significant discount to replacement costs is a valuable opportunity for Pacific Ethanol. With the federal Renewable Fuel Standard requiring increasing levels of ethanol to be blended into gasoline and the implementation of California’s Low Carbon Fuel Standard beginning in 2011, we are optimistic about the future of the ethanol industry and the success of our company.”