First United Ethanol LLC counters confusion

By Craig A. Johnson | August 10, 2009
Report posted Aug. 26, 2009 at 2:18 p.m. CST

On August 23, Georgia Public Broadcasting was the first to report that First United Ethanol LLC, (FUEL) of Camilla, Ga., was suffering financial difficulties that threatened to shut down the plant. The report came after FUEL reported it had more than $100 million in long-term debt and would have to seek bankruptcy protection if unable to meet its obligations.

The announcement is less a revelation for FUEL, which notes the language of the 10-Q filing is simply a statement of risk and not unique to its company or any company making a statement to the U.S. Securities and Exchange Commission.

"The stories do not present an accurate depiction," says Alicia Shirah, director of communications for FUEL. "We have absolutely no intention of filing for bankruptcy."

According to a statement released by FUEL on Monday, "First United Ethanol LLC does not anticipate filing bankruptcy but instead is realizing positive crush margins that continue to improve our cash flow and liquidity. FUEL is producing at 100 percent capacity and expects to maintain production as supported through its current cash flow. FUEL fully expects to pay its principal and interest payments to WestLB on Sept. 30th as scheduled."

The statement continues and describes the statements made in the 10-Q filing as "an effort to fully comply with SEC reporting requirements, we disclose all possible contingencies in our quarterly filings, including bankruptcy. However, as we state in the report, we do expect to be able to satisfy our cash requirements for the next 12 months using only our revolving line of credit, senior credit facility and earnings from operations. "

This confusion is nothing new for FUEL, and in fact, has happened before. According to Shirah, "We're enjoying excellent crush margins. The markets seem to have turned around and we feel good about where we are."