Pacific Ethanol amends credit facility for subsidiary Kinergy

By Marisa Wong

Madison, Wis., Jan. 31 - Pacific Ethanol, Inc. and its wholly owned subsidiary, Kinergy Marketing LLC, entered into a ninth amendment to a loan and security agreement on Jan. 25, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The latest amendment relates to Kinergy's credit facility under the agreement with Wells Fargo Capital Finance, LLC, which is dated July 28, 2008.

The financial covenant related to the amount of EBITDA Kinergy is required to generate was amended as follows:

• Beginning with the fiscal quarter ended June 30, 2011 through and including the quarter ended Sept. 30, Kinergy is required to generate quarterly EBITDA of $350,000 and an EBITDA of $900,000 for those two quarterly periods.

• For the quarter ended Dec. 31, Kinergy is required to generate quarterly EBITDA of $800,000 for the two consecutive quarterly periods then ended.

• For the quarter ending March 31, Kinergy is required to generate quarterly EBITDA of $450,000; and

• For the quarter ending June 30 and each quarter thereafter, Kinergy is required to generate quarterly EBITDA of $450,000 and an EBITDA of $1.1 million for each two consecutive quarterly periods.

The amendment was effective as of Dec. 31.

In connection with the amendment, Kinergy paid a $25,000 fee to Wells Fargo.

Pacific Ethanol is a Sacramento-based marketer and producer of low-carbon renewable fuels. Kinergy is the ethanol sales and distribution arm of Pacific Ethanol.

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