Aventine files reorganization plan
Ethanol producer Aventine Renewable Energy Holdings Inc. filed a proposed reorganization plan and disclosure statement telling holders of the $315.5 million in unsecured notes that they stand to take home 80 percent of the new stock which they will split up with unsecured creditors owed $15 million.
Pre-bankruptcy secured creditors are to be paid in full for their $27.8 million in claims. Cash will come from the sale of $105 million in new secured notes.
The hearing to approve the disclosure statement is set for Jan. 13. The confirmation hearing for approval of the plan is tentatively on the Feb. 24 court calendar.
The sale of the new notes is backstopped by holders of 70 percent of existing notes. Buyers of the notes will receive the other 20 percent of the new stock. The noteholders providing the backstop will receive a $3 million fee.
Aventine's financial adviser predicts that the enterprise value of the reorganized company will range between $220 million and $260 million. The projected midpoint equity value is $211 million, meaning that each of the 8.55 million in new shares theoretically would be worth $24.96 as a midpoint value.
The disclosure statement says the company still hasn't decided whether to keep or sell the unfinished Mt. Vernon and Aurora West plants in Indiana and Nebraska. Aventine halted construction before filing as a result of inadequate liquidity.
The reorganized company also will be financed with a $20 million secured asset-backed loan facility.
The new secured notes to be issued under the plan will pay cash interest at 13 percent or, at the company's option, at a 15 percent rate with more notes.
Aventine said it considered alternatives and decided that a balance sheet restructuring was the best outcome for creditors.
The company also filed a motion asking for a third extension of the exclusive right to proposes a plan. The new deadline would be March 4 if the court grants the motion at a Jan. 13 hearing.
Aventine has $30 million in secured financing provided by the holders of 75 percent of the unsecured notes. First-lien lenders in total were owed $40.25 million at the outset.
The Chapter 11 petition filed in April by Pekin-based Aventine listed $799 million in assets against debt totaling $491 million. It has two plants in operation and two in construction. The operating plants have an annual capacity of 207 million gallons of ethanol. The two plants being built are designed to produce 220 million gallons.
The case is In re Aventine Renewable Energy Holdings Inc., 09-11214, U.S. Bankruptcy Court, District of Delaware (Wilmington).