VeraSun gets approval for $110.6 million of DIP financing to fund ethanol plants until sold

By Jennifer Lanning Drey

Portland, Ore., Feb. 10 - VeraSun Energy Corp. obtained court approval 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 source familiar with the case.

The approval came Tuesday from the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, although the company previously secured other DIP facilities to fund operations at the U.S. BioEnergy plants, VeraSun said those facilities were set to 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.

The company said the replacement facilities will allow it to preserve the going-concern value of the plants while it attempts to sell them.

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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