Nova Biosource Fuels to cut workforce, explore restructuring after financing talks fail

By Caroline Salls

Pittsburgh, Feb. 27 - Nova Biosource Fuels, Inc. is taking steps to reduce the workforce at its Seneca, Ill., and Clinton, Iowa, biodiesel refineries and the company's engineering and construction subsidiary in light of an unexpected breakdown in negotiations with a working capital financing source and the inability to secure other financing, according to an 8-K filed with the Securities and Exchange Commission.

Without additional financing, the company said the refineries do not have enough working capital to continue operations.

Nova said it is considering its restructuring options and is in discussion with Seneca refinery project lender WestLB AG.

According to the 8-K, Nova's board of directors has authorized management to idle the Seneca refinery and suspend plans for restarting the Clinton refinery.

The company said the Seneca refinery will remain operational until on-hand feedstocks and consumables have been processed into finished biodiesel and related co-products, at which point it is expected to be idled.

The duration of the shutdown is unknown, according to the 8-K.

Nova Biosource is a Houston-based energy company that refines and markets standard biodiesel and related co-products.

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