DIRK LAMMERS

SIOUX FALLS, S.D. (AP) ¿ Ethanol producer Aventine Renewable Energy Holdings Inc. filed for Chapter 11 bankruptcy protection on Wednesday, the latest victim in an industry stung by volatile commodity prices and shrinking profit margins.

The Pekin, Ill.-based company warned last month that it may have to file if it could not raise sufficient cash in the near-term.

In its Delaware court filing, Aventine listed assets of $799 million with $491 million in debt. The company listed 30 creditors.

Chief Executive Ron Miller said Aventine is challenged by a difficult market environment, and the filing will allow it to operate without interruption.

"We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential investors, and definitively resolve our debt issues," Miller said in a statement.

Aventine last month said it did not expect to have enough cash to satisfy a $15 million interest payment due April 1 on an outstanding senior unsecured 10 percent fixed-rate note or to pay $24.4 million due to its engineering and construction contractor, Kiewit Energy Co.

In its most recent earnings statement, Aventine reported a fourth-quarter 2008 loss of $36.9 million, or 86 cents per share, compared with a profit of $3.3 million, or 8 cents per share, during the year-earlier period.

The New York Stock Exchange suspended trading of Aventine shares on March 30, moving the stock to its "pink sheets."

Sioux Falls-based VeraSun Energy Corp., the nation's No. 2 ethanol producer, filed for Chapter 11 bankruptcy protection Oct. 31 after tightening credit markets erased its lifeline to weather the swings in corn and fuel prices.

Valero Energy Corp., the nation's largest independent oil refiner, bought five VeraSun plants and is in the process of closing on two more for a total $477 million. Secured lenders submitted successful credit bids for the remaining VeraSun facilities.

Another biorefiner, Pacific Ethanol Inc., warned in a Securities and Exchange Commission filing late last month that bankruptcy protection was a possibility and it may not be able to continue past April 30 without renegotiating its debts or finding new sources of cash.

"The company's revenue surged by more than half to $703 million last year," energy analyst and trader Stephen Schork said in a recent client note, "but just like Gateway Ethanol, Greater Ohio Ethanol, Beatrice Biodiesel, Bioenergy of America, Ethanex Energy, et al. before it, Pacific Ethanol cannot navigate the volatility in agricultural feedstocks and the attendant squeeze on margins."

Schork said net fuel ethanol production fell for a second-straight month in January as poor margins discouraged output. Regional production was strong in the East and Gulf Coast but weak in the West because of troubles with Pacific Ethanol, he said.

The nation's renewable fuel standard ensures demand for ethanol by calling for 11.1 billion gallons of renewable fuel to be blended into gasoline this year, with that number climbing to 36 billion gallons by 2022.

Miller said the industry has sound long-term prospects and Aventine anticipates a strong rebound as mandates increase.

"We are taking steps to ensure our business will be ready when the current markets turn up again," he said.

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