Message #10 From:
NewsBot Date: September 2, 2008 08:50:18 AM
BIOF Stock: BioFuel Announces Amendment to Credit Agreement
DENVER, Aug. 29 /PRNewswire-FirstCall/ -- BIOFUEL ENERGY CORP.
(Nasdaq: BIOF stock) -- BioFuel Energy Corp. (Nasdaq: BIOF) announced today that its
operating subsidiaries, which own and operate the Wood River and Fairmont
ethanol plants, had amended their credit agreement. The amendment permits the
subsidiaries' full access to their $20 million working capital facility and
permits daily access to their revenue account, in each case solely for the
purchase of corn, natural gas, chemicals, enzymes, denaturant and electricity.
Previously, the subsidiaries had access to only $5 million of their working
capital line and the ability to disburse their revenues only at the end of
each month. As a result, the operating subsidiaries now appear to have
sufficient liquidity to complete the commissioning of the ethanol plants. The
Company's plants began commercial operations in June. They are expected to
complete initial performance testing within the next two to three weeks.
The Company indicated that the amendment will not permit it to completely
meet its obligations to Cargill incurred in delivering corn to the operating
subsidiaries and as a result of the parent company's hedging over the past two
months. As previously reported, the Company engaged in a series of hedging
transactions with Cargill that resulted in significant losses. All such
hedging transactions have now been closed out. At August 27, 2008, the
Company had approximately $36 million of realized hedging losses. In
addition, it held short term corn delivery obligations which incorporated a
further $3 million of unrealized losses. Cargill has not yet been paid for
approximately $22 million of these amounts. The parent company currently does
not have sufficient liquidity to retire these obligations. The operating
subsidiaries have received approximately $25 million of parent company corn
inventory that it has not been reimbursed for. Under the bank agreement, as
amended, such reimbursement cannot currently be made. The Company indicated
that it intends to continue to review possible solutions with Cargill and its
operating subsidiaries' lenders. However, there can be no assurances that
these efforts will prove successful.
This release contains certain forward-looking statements within the
meaning of the Federal securities laws. Such statements are based on
management's current expectations, estimates and projections, which are
subject to a wide range of uncertainties and business risks. Forward-looking
statements should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of whether, or the times by
which, our performance or results may be achieved. Factors that could cause
actual results to differ from those anticipated are discussed in our Exchange
Act filings and our Annual Report on Form 10-K.
BioFuel Energy currently has two 115 million gallons per year ethanol
plants in the Midwestern corn belt.
Contact: Kelly G. Maguire For more information: Vice President - Finance and http://www.bfenergy.com Chief Financial Officer (303) 592-8110 kmaguire@bfenergy.com
