By Dan Shaw, Evansville Courier & Press
A company building an ethanol plant near Mount Vernon has declared bankruptcy.
Aventine Renewable Energy, based in Pekin, Ill., announced Wednesday it had filed for Chapter 11 protection. As a reason for the decision, the company cited the tight margins in the ethanol business.
The supply of ethanol now exceeds the demand for the fuel, Aventine explained in a release.
Ron Miller, Aventine president, said, "We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential investors, and definitively resolve our debt issues. Aventine is one of the most widely recognized names in our industry."
Aventine Renewable Energy has been building a plant at the site of the Ports of Indiana-Mount Vernon since late 2007. Work ground to a halt there in November, but company executives had hoped it would be resumed by the summer. It wasn't immediately clear today how the bankruptcy would affect those plans.
The company recently reported a loss of $36.9 million for the fourth quarter of 2008. It raised the possibility of bankruptcy at the same time. Aventine's stock price has likewise been battered. The New York Stock Exchange recently delisted the company after finding that the total value of its shares had fallen below $15 million. Aventine is not the only ethanol producer in trouble. In October, VeraSun Energy, based in Sioux Falls, S.D., filed for bankruptcy. The company agreed earlier this month to sell a number of ethanol plants - including an incomplete one in Reynolds, Ind. - to Valero Renewable Fuels, based in San Antonio.
Meanwhile, Abengoa Bioenergy, a St. Louis company, continues work on an ethanol plant near West Franklin, Ind., also in Posey County. The project, which will churn out 88 million gallons a year, will be finished by the end of 2009, says the company.
"The ethanol industry has sound long-term prospects and we anticipate a strong rebound as the government-imposed biofuels mandate continues to increase..." Miller said. "We are taking steps to ensure our business will be ready when the current markets turn up again. The vast majority of our suppliers will not see any disruptions in their business dealings with us."