Aventine Raises $97.1 Million from the Sale of Auction Rate Securities
Published June 14th, 2008
Aventine Renewable Energy Holdings, Inc. (NYSE:AVR), a leading producer, marketer and end-to-end provider of clean renewable energy, today announced that it has sold all of the auction rate securities it previously held.
The Company sold $127.2 million par value of student loan-based auction rate securities to various parties for cash totaling approximately $97.1 million. In its first quarter ended March 31, 2008, the Company had recorded an impairment charge of $21.6 million related to the remaining auction rate securities it held at March 31, 2008. As a result of the recent sales, the Company will now record an additional loss on the sale of these securities of $8.5 million in the second quarter of 2008.
Ronald H. Miller, Aventine’s President and Chief Executive Officer said, “The funds received from the sale of the auction rate securities will be used to fund plant construction, which remains an integral part of our growth strategy. We expect to begin ethanol and DDGS production at our new Aurora, Nebraska and Mt. Vernon, Indiana plants, currently under construction, in the first quarter of 2009 as scheduled.”
With the cash raised from the sale of the auction rate securities, and including both cash on hand and borrowing availability under its liquidity facility as of March 31, 2008, the Company would have had liquidity available to it in excess of $300 million. As of March 31, 2008, the Company needed approximately $250 million to complete its two new production facilities. In addition, the Company is continuing discussions with banks to increase the amount of liquidity available to it under a revolving asset-based loan facility. Existing debt agreements permit the Company to increase its senior credit facilities by another $75 million, potentially further strengthening the Company’s liquidity position.
About Aventine
Aventine is a leading producer, marketer and end-to-end distributor of ethanol to many leading energy companies in the United States. Aventine is also a marketer and distributor of biodiesel. In addition to ethanol, Aventine also produces distillers grains, corn gluten feed, corn germ and brewers’ yeast. Our internet address is www.aventinerei.com.
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