Former California Secretary of State Bob Jones secures $11.5 million bail-out from California for struggling Pacific Ethanol

The state of California will raise $11.5 million from the sale of tax-exempt bonds that will be used to provide a low-interest loan to Pacific Ethanol. Critics of the move say that the bond sale is permitted under state law for companies who classify part of their plant as “waste treatment plants”, but that the production of ethanol and distillers grains involves no waste treatment.

Last month, an investment company owned by Bill Gates, Cascade Investments, filed to convert its preferred shares in Pacific Ethanol to common stock and register a potential sale.

Cascade owns 21 percent of Pacific Ethanol and has lost more than $60 million on the stock since August. Cascade invested $84 million in 2005.

Pacific Ethanol reported net sales up 93 percent to $118 million for the third quarter, but the company recorded a loss of $3.8 million, or 7 cents per share, because of high corn prices and low ethanol prices. The company’s shares fell 93 cents — or 11.9 percent — to a 52-week low of $6.89 on Friday.

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