Panda Ethanol has filed Chapter 11 bankruptcy for it's Hereford, TX Subsidiary. The subsidiary has been plagued by construction problems and delays that caused Panda to fire the general contractor and assume control of the construction process. Plans are to put the facility, which is in the late stages of construction, up for sale.
Although the ethanol refinery is in the late stages of construction, on December 31, Panda Ethanol was notified by Societe Generale, the administrative agent for the Hereford subsidiary's lending syndicate, that one of the major syndicate banks had informed Societe Generale that it would not fund its share of further borrowing requests for the project. After repeated conversations with the syndicate and an unsuccessful attempt to secure debtor-in-possession financing, the Hereford subsidiary's management concluded that the only prudent option available was to put the facility up for sale through a Section 363 sale process.
According to the release this bankruptcy does not include Panda Ethanol, the parent company.
The Hereford facility was one that I have been looking forward to seeing in operation. This facility and others planned by Panda were to use cow manure from local feedlots to power the plant. The good news is that there is already a potential buyer.
The Hereford subsidiary is currently in negotiations with a potential buyer. Pursuant to Section 363 of the Bankruptcy Code, other companies will have an opportunity to submit bids for the facility under a court-supervised process. The company expects for a sale to close within 60 to 90 days.
Source : Panda Ethanol Press Release
3 comments:
I too am saddened about Panda Ethanol. They were delt a bad hand. First contractor problems, and then the poor economy sucked up investor funding.
From what I undertand there is still construction ongoing, so hopefully the new owners will have it running shortly.
There is over a billion pounds of manure in that area that needs to be put to good use.
Yeah, the problems that they encountered during construction were particularly troublesome. If everything had gone according to schedule they would have been completed long ago and would have been producing during at least some of the good times the industry has seen in the recent past. With their business model of using manure for process energy they should be able to produce ethanol at a lower cost giving them an advantage once they start producing. Hopefully another company will buy them and complete the plant so we can see how well their business model works.
This has been a very difficult time for alot of employees and their families.We need to pray that the new owners will offer all employees of Panda a job and that it will be even better than what Panda had to offer,and will start up very soon!!
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