Ethanol company idles plant, misses debt payment

By Holly Jessen | October 11, 2012

Biofuel Energy Corp., which owns two 110 MMgy ethanol plants, has idled one of its plants and revealed in a U.S. Securities and Exchange Commission filing that it had missed a $3.6 million debt payment.

The company’s Fairmont, Minn., facility, Buffalo Lake Energy LLC, was idled the end of September. “Commodity margins have continued to weaken as the impact of the drought in the Corn Belt continues and ethanol remains in surplus,” said Scott H. Pearce, president and CEO, in a prepared statement. “As a result, our current expectations are that the Fairmont plant will remain idle until we are able to secure local corn at price levels that support better margins.” He added that the company didn’t plan to make any changes to the operations team of Buffalo Lake Energy LLC. That will allow it to continue to operate its grain elevator and stay in a position to restart the ethanol plant on short notice.

Pioneer Trail LLC, the second facility, is still in operation, Kelly Maguire, executive vice president and chief financial officer, told Ethanol Producer Magazine on Oct. 11. This facility is located in Wood River, Neb.

A SEC document filed Oct. 4 revealed that Biofuels Energy received a notice of default from First National Bank of Omaha on Sept. 28. The payment was for principal and interest on a loan totaling $170.5 million. The credit agreement is dated Sept. 25, 2006.