DALLAS, Aug. 20, 2012 (GLOBE NEWSWIRE) -- Aventine Renewable Energy Holdings, Inc. (OTCBB:AVRW), today announced that it has entered into a Restructuring Agreement with 100% of its term loan lenders. Under the terms of this agreement the Company would convert the majority of its outstanding term loan debt into newly issued common equity of the Company, representing, on a fully diluted basis, approximately 92.5% of the issued and outstanding common stock after the issuance (subject to downward adjustment and/or dilution as described in the agreement).
The Company's Board of Directors unanimously approved entering into the agreement and holders of approximately 60% of its common stock have also approved the agreement. If completed, the Company expects the restructuring to reduce the Company's existing debt by approximately $135 million and significantly lower the Company's annual cash interest expense. As part of the transactions, the term loan lenders have also agreed, subject to receipt of internal credit approvals, to provide $30 million in the form of additional indebtedness to further improve the Company's liquidity.
With the commitment of all the requisite stakeholders the transactions are expected to be consummated without any court approvals. If completed, the Company expects that unsecured creditors would not be affected by the restructuring and trade creditors would continue to receive payments in the ordinary course. The transactions are targeted to close by the end of the 3rd quarter of 2012.Completion of the transactions contemplated by the Restructuring Agreement is subject to certain customary conditions and approvals as well as the finalization of definitive documentation. "The Company would like to thank its lenders and significant stakeholders for supporting its business and operations. These are difficult times for the industry and the consummation of these transactions is expected to result in a much stronger balance sheet for the Company," said John Castle, Aventine's Chief Executive Officer.