, the troubled ethanol marketer and producer, became another victim of the rough and tumble corn-ethanol game Monday. Subsidiaries of the Sacramento-based company, which house its four production facilities, filed for bankruptcy protection. Pacific Ethanol was quick to add that its two marketing arms --
Pacific Ag. Products
-- will not follow the other subs into Chapter 11.
The stock fell 25 cents from the previous day's close of 57 cents, marking a 44% death-spiral on the day. It was down 2.5% in the early parts of after hours trading. The company also noted in its quarterly report that total volume of ethanol sales decreased 24% as compared to the same quarter last year.
Volatile corn and oil prices, slowing demand and declining ethanol prices were all blows to the company's well-being. Though the U.S. is the world's largest consumer of energy, Pacific Ethanol's bankruptcy is only one of a series in the ethanol sector. Two weeks ago, Dallas-based
filed for Chapter 11 protection. Another filing came last October courtesy of
, reportedly one of the nation's largest ethanol producers at the time.
"We are unwavering in our vision of being a leading producer and marketer of low carbon fuels in the Western United States," Neil Koehler, Pacific Ethanol's CEO and President, said in a statement. "While the market environment for the ethanol industry has been challenging over the last several quarters, we remain confident that a restructured company will grow and prosper as the demand for low-carbon fuels increases."
As part of the bankruptcy, the company arranged up to $20 million in debtor-in-possession financing with some lenders to continue servicing ongoing customer obligations. Kinergy amended its credit facility with
Wachovia Capital Finance Corporation
, giving the sub up to $10 million through October 2010 for its own capital needs.
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