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VeraSun granted interim access to $81.7 million of financing for ethanol facilities
By Caroline Salls
Pittsburgh, Jan. 15 - VeraSun Energy Corp. was granted interim access to $81.7 million of a total of $110.6 million in debtor-in-possession financing from AgStar Financial Services, PCA that will be used to fund operations at seven U.S. BioEnergy ethanol production facilities, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.
The final hearing is scheduled for Feb. 10.
Although the company previously secured other DIP facilities to fund operations at the U.S. BioEnergy plants, VeraSun said those facilities expire on Jan. 15, and market conditions for the production and sale of ethanol have not improved markedly during the company's Chapter 11 case.
VeraSun said its liquidity situation has also not improved.
The company said the replacement facilities will allow it to preserve the going-concern value of the plants while it attempts to sell them.
As a result, the facilities are tied to sale process milestones. Specifically, the company must file a sale motion by Jan. 27, obtain court approval of the bid procedures by Feb. 9, hold an auction by March 16, secure sale approval by March 17 and close the sale by March 31.
The DIP facilities will mature on the earliest of April 30, upon the closing of the sale of the membership interests in or substantially all of the assets of the borrower and the effective date of a plan of reorganization.
Interest will be 12% plus the greater of Libor or 3%.
VeraSun, based in Brookings, S.D., produces renewable fuel. The company filed for bankruptcy on Oct. 31. Its Chapter 11 case number is 08-12606.
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