Pacific Ethanol's Debtors Agree to 9% Interest on Overdue Loan

Jan 01, 2020

Sacramento-based renewable fuel company Pacific Ethanol Inc. got its overdue debt of $63.2 million extended with an interest rate of about 9%, according to documents filed with the Securities and Exchange Commission.

Since March, Pacific Ethanol (Nasdaq: PEIX) has been working to refinance its debt, which came due and was extended several times this year. The company announced a two-year reprieve earlier this week.

Sacramento Business Journal reports that the company is the Sacramento region's largest publicly traded company by revenue.

To get the debt extended, Pacific Ethanol had to get eight separate shareholders to sign off on the terms, including five funds managed by New York-based BlackRock Financial Management Inc., a subsidiary of BlackRock Inc., and Rye, New York-based Candlewood Investment Group LP, according to a filing with the SEC.

The debt stems from Pacific Ethanol's $76 million purchase of its second ethanol plant in Pekin, Illinois. In 2017, Pacific Ethanol bought the former Illinois Corn Processing LLC plant from SEACOR Holdings Inc. and MGPI Processing Inc. The plant can produce 90 million gallons of ethanol annually for fuel or for beverage production. The plant is adjacent to another biorefinery that had already been owned and operated by Pacific Ethanol.

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