Liberty Renewable Fuels seeks private equity after small investor effort comes up short

In Michigan, Liberty Renewable Fuels is reaching out to private equity investors after a drive to fund the 110 Mgy corn ethanol plant with small investor dollars came up short of expectations. Construction will be postponed in December if new financing is not complete.

The Wall Stret Journal recently ran a story on the difficulty of financing new ethanol plants, with cancellations and delays becoming a norm. A partner at Baker & McKenzie described some plants as “under death watch”.

BioFuel Energy announced last month that it will stop construction on a third new ethanol facility, owing to low ethanol prices. The halt came as three Australian plants were halted and four oithers in the US in October and November.
In Minnesota, Agassiz Energy announced a suspension of its $115 million ethanol plant near Erskine owing to financing difficulties associated with high corn costs and reduced ethanol prices. Three other firms suspended construction or halted production at ethanol plants in the Midwest. Glacial Lakes Energy’s plant in Meckling, SD, Chippewa Valley’s 40 Mgy plant in Benson, MN and the Alchem ethanol plant in Grafton, ND received the axe.

All companies said that the fall in ethanol prices were the cause of the decision.

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