By Atlanta Business Chronicle

Georgiaâ¿¿s largest corn-ethanol manufacturer is out of compliance with two 2007 loans that helped launch the business, according to a Securities and Exchange Commission filing.

A wholly owned subsidiary of First United Ethanol LLC of Camilla, Ga., received a written notice Jan. 19 from the New York office of WestLB AG, a German commercial bank, indicating that the company has violated terms of a $100 million construction loan and a $15 million working capital loan.

The notice cited audited financial statements provided by First United Ethanol for the fiscal year that ended last Sept. 30. Those statements included a ⿿going concern⿝ finding by the auditors, questioning the company⿿s ability to continue to function as a business entity.

The issuance of an audit opinion containing a ⿿going concern⿝ finding constitutes a violation of the loan agreement, according to the SEC filing.

While First United Ethanol has struggled at times since opening for business in the fall of 2008, the companyâ¿¿s latest financial report showed significant improvement.

The company reported late last month that First United earned $203.5 million in revenue its 2010 fiscal year, up 22 percent from its $166.6 million in revenue in 2009.

Still, the plant lost $2.2 million in fiscal 2010, although that was a huge improvement over its 2009 loss of $28.5 million.

The loan agreement gives First United 30 days to correct the violation.

Otherwise, the company could be declared in default, according to the filing.

Copyright 2011 American City Business Journals

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