Pacific Ethanol Inc., refueling itself after emerging from a 2009 bankruptcy filing by its production subsidiaries, said Wednesday it has completed another stock offering that pumped $11 million into the gasoline additive firm.
The Sacramento-based company said most of the proceeds will pay off $10 million in loans that were used to help buy back a 67 percent stake in its four production plants.
"We'd like to be able to buy back 100 percent," said Pacific Ethanol Vice President Paul Koehler, "but 67 percent gives us a strategic controlling interest in the control of the plants."
Those plants in Oregon, Idaho and California were acquired by lenders after the company's bankruptcy case amid a sputtering market for ethanol.
They include a Stockton facility and an idled plant in Madera.
The stock offering is Pacific Ethanol's second since July and both sold out in less than a week, said Koehler.
Most of the investors were New York-based investment funds that had previously put money into the company, he said.
This time, Pacific Ethanol said it sold 27.5 million units, priced at 40 cents each, consisting of one share of common stock and one warrant to purchase an additional share.
After paying off its loans, the company will use the remaining $1 million in sale proceeds for general operational expenses, Koehler said.
"We will continue to do what we've always done: be the leading marketer and producer of low-carbon renewable fuels in the western United States. This just secures our position and ability to do that."
Despite recent turmoil that forced Pacific Ethanol and other biofuels companies into bankruptcy protection, the ethanol industry has "a very rosy" future, said University of California, Davis, professor Daniel Sperling, a transportation fuels expert.
"There's still a big market for ethanol production, especially low-carbon, efficient production. There are very few ethanol plants in California, so that positions (Pacific Ethanol) well."
Meanwhile, the company faces another threat: stock de-listing.
For several years, Pacific Ethanol's stock, which trades on the Nasdaq, has struggled to avoid being dropped under rules triggered whenever a stock's price dips below $1 a share for more than 30 days. The last time Pacific Ethanol's share price landed above $1 was in April. On Wednesday, it closed at 40 cents.
Koehler said he's confident the company can meet Nasdaq's timeline.
"It's a yearlong process. We'll figure it out and get the stock back above a dollar because we're a good investment," said Koehler.
The company, launched in 2003 by former California Secretary of State Bill Jones, has been rebuilding since completing its subsidiaries' bankruptcy case two years ago. Its Stockton plant reopened in early 2011, but the Madera facility remains closed.
"We'll open Madera when market conditions allow," said Koehler. "Ethanol margins have been tight and we wouldn't want to open that plant in a tight environment."