Panda Ethanol Puts Hereford Plant Up For Sale and Files for Chapter 11 Bankruptcy

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Researched by Industrial Info Resources (Sugar Land, Texas)--Panda Ethanol Incorporated (OTC:PDAE) (Hereford, Texas) a subsidiary of The Panda Group (Dallas, Texas) has put their unfinished fuel ethanol plant subsidiary Hereford Biofuels (Hereford) up for sale and filed for voluntary chapter 11 bankruptcy. The filing does not include Panda Ethanol, the parent company of the Hereford Biofuels division.

The struggling project has been under construction since September of 2006, and the company fired contractor Lurgi Incorporated (Memphis, Tennessee) in September 2008, stating that they had "lost confidence in Lurgi's ability to finish the facility due to continued construction delays."

The company plans to finish construction themselves by February 28, 2009, and put the Hereford facility, the company's largest asset, up for sale. Panda is currently in talks with a potential buyer and expects to close the sale within the next 60 to 90 days.

Panda had plans to be a large player in the fuel ethanol market until the difficult capital markets surfaced and ethanol prices dropped. The company, which utilizes cow manure fuel feedstocks to run their plants, had plans to build more than 535 million gallons of annual capacity. Along with the 100 million-gallon-per-year plant in Hereford, the company planned to build in Muleshoe (105 million gallons per year) and Sherman (115 million gallons per year) in Texas; Yuma, Colorado (100 million gallons per year) and Haskell, Kansas (115 million gallons per year). Plans to move forward on the additional facilities are on hold until more favorable market conditions return to the ethanol industry.

Industrial Info's Ethanol Database provides a comprehensive outline of all current development activities in the emerging alternative fuels market. This database covers 177 ethanol plants in operation and 530 plants under development. It also covers 145 operational biodiesel plants and 245 biodiesel plants under development.

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