Pacific Ethanol rearranges CoBank and Compeer Financial loans while looking to sell off assets

December 23, 2019 |

In California, Pacific Ethanol, Inc. entered into long-term amendments to its senior secured notes and to its term loans with CoBank and Compeer Financial for its Pekin and Illinois Corn Processing plants.

Pacific Ethanol has entered into an amendment extending the final maturity of the company’s senior secured notes by two years to December 15, 2021. The amendment provides for scheduled principal payments of $5.0 million per quarter commencing on September 30, 2020. In connection with the amendment, Pacific Ethanol issued approximately 5.5 million shares of common stock and three-year warrants to purchase up to 5.5 million shares of common stock at $1.00 to the senior secured noteholders. The warrants have a mandatory cash exercise once the company’s stock price trades at $1.50 for a stated period, and all proceeds of the warrants will be used to repay the senior secured notes.

Pacific Ethanol Pekin, LLC, entered into an amendment to its credit agreement to fully waive prior covenant violations and to defer $10.5 million of scheduled principal payments until the term loan maturity date of August 20, 2021. In addition, Pekin is not required to make scheduled principal payments until September 30, 2020, at which time $3.5 million will be due, with the same amount due quarterly thereafter until maturity. Illinois Corn Processing, LLC, entered into an amendment to its credit agreement to defer the scheduled principal payment of $1.5 million, originally due on December 20, 2019, to the maturity date of September 20, 2021. Scheduled principal payments of $1.5 million per quarter will resume March 20, 2020.

Pacific Ethanol continues to progress its strategic initiatives. This process may result in the sale of assets, mergers, partnerships, financings or other transactions to strengthen the company’s balance sheet and maximize shareholder value. The company has signed letters of intent on asset sales and will provide material updates as appropriate.

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Category: Fuels

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