Pacific Ethanol Inc. said Tuesday it has paid off the last of the loans on its West Coast production plants, erasing the debt that once forced the facilities into bankruptcy.
The Sacramento ethanol manufacturer said it has paid the final $17 million in plant debt. Its president and chief executive, Neil Koehler, called the repayment “an important milestone” that will help future profits.
Retiring the production plants’ debt represents a positive step at a difficult time for Pacific Ethanol, which has seen ethanol prices tumble in the past year. The company lost $18.9 million in the first nine months of its fiscal year, compared with a profit of $7.8 million a year earlier. Fourth quarter and full year results are scheduled to be released March 9.
The repayment affects debt that was attached specifically to the four West Coast plants. Pacific Ethanol itself was still $190.3 million in debt as of last Sept. 30, the latest figures available.
The four plants once held so much debt that in 2009, with ethanol prices collapsing, Pacific Ethanol was forced to place them in Chapter 11 bankruptcy reorganization. Lenders forgave more than $200 million in debt but took ownership of the plants in return.
Since then, Pacific Ethanol has been able to gradually buy the plants back from the lenders and, despite the recent drop in prices, is considered to be in better health than in 2009.
Its West Coast plants are in Stockton; Madera; Boardman, Ore.; and Burley, Idaho. The company also purchased four plants in Illinois and Nebraska after buying a Midwest competitor last year.
Pacific Ethanol shares closed at $4.07, up 13 cents, on the Nasdaq market.