December 13 (SeeNews) - US ethanol producer and marketer Pacific Ethanol Inc (NASDAQ:PEIX) on Monday announced a series of agreements to refinance debt and acquire ownership in a grain elevator in Nebraska.
The company is refinancing its USD-155.1-million (EUR 146.1m) principal term debt, due in September 2017.
The deals include a new USD-64-million five-year term amortising loan from CoBank and First Farm Credit plus a revolving credit line of USD 32 million, as well as a three-year senior note offering of USD 55 million.
In addition, Pacific Ethanol will create a new company with the Aurora Cooperative Elevator Company (ACEC), called Pacific Aurora LLC (PAL). The ethanol group will contribute its Aurora plant assets in Nebraska into the new firm, while ACEC will contribute its Aurora West Grain Elevator, loop track, related land and other assets. Pacific Ethanol will sell a 14% stake in PAL to ACEC for USD 30 million in cash and will end up owning 74% of the combined business. PAL will also obtain a five-year amortising, revolving term loan of USD 30 million from CoBank.
Pacific Ethanol said the deals will reduce total debt outstanding by more than USD 12 million and annual interest costs by over USD 8 million. At the same time, the company's cash, working capital and liquidity resources will increase by USD 55 million.
Pacific Ethanol also said that in connection with the refinancing, it will increase the line of credit facility of Kinergy, its ethanol marketing subsidiary, by USD 10 million to USD 85 million.
"In this series of agreements, we will accomplish a major milestone for the company by refinancing the Midwest plants’ term debt at favorable terms, strengthening our balance sheet and significantly lowering our cost of capital," said Pacific Ethanol's president and chief executive Neil Koehler.
(USD 1.0 = EUR 0.942)