BioFuel Energy to get USD 19.4m loan from hedge funds
(ADPnews) - Sep 29, 2010 - US ethanol maker BioFuel Energy Corp (NASDAQ:BIOF) said today it will receive a USD 19.4 million (EUR 14m) short-term loan from local hedge funds Third Point and Greenlight Capital Inc.
The loan, with an interest rate of 12.4%, must be repaid on March 24, 2011. BioFuel Energy intends to pay it back with the proceeds from a rights offering, where existing shareholders could buy 4 million shares of convertible preferred stock for USD 10 apiece. In case, the firm is not able to repay the loan, Third Point and Greenlight will get a larger stake in BioFuel Energy, enhancing further their current 69% stake.
BioFuel Energy's debt amounted to USD 212 million at the end of 2009. In the first quarter of 2010, the company recorded a net loss of USD 10.4 million, which it widened to USD 12 million in the second quarter of the year.
BioFuel Energy is currently operating two ethanol production facilities in Fairmont, Minnesota and Wood River, Nebraska, with combined output of 110 million gallons (416.4 million litres) per year.