Pacific Ethanol to Bring California Fuel Ethanol Plant Back On-Line

Researched by Industrial Info Resources (Sugar Land, Texas)--Following improved operating margins, alternative fuels company Pacific Ethanol Incorporated (NASDAQ:PEIX) (Sacramento, California) announced that it will restart a plant that the company closed in 2009, when, during times of unfavorable market conditions, ethanol margins and prices were low and corn prices were high.

The 40 million-gallon-per-year plant in Madera, California, began operations in October 2006 and suspended operations in January 2009. The plant, which utilizes Delta-T technology, has been shuttered for the last five years.

The company expects the plant to be producing ethanol again by late in the third quarter of 2014.

In 2006, the company had the goal of producing 220 million gallons per year by the middle of 2008. When the Madera plant goes online, the company will have the capacity to produce 200 million gallons per year of fuel ethanol. Pacific has additional operating plants in Stockton, California (60 million gallons per year); Burley, Idaho (60 million gallons per year); and Boardman, Oregon (40 million gallons per year).

Pacific recently retired in full about $22 million of principal amount of senior unsecured notes. On April 8, 2014, the company announced that it had closed its previously announced underwritten public offering of 1.75 million shares of its common stock at a public offering price of $16 per share, for gross offering proceeds of $28 million.

Neil Koehler, the company's president and chief executive officer, said: "With the retirement of our senior unsecured notes, we have eliminated all indebtedness of the parent company, which lowers our overall cost of borrowing, improves profitability, and provides a more stable financial condition for continued growth."

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