VeraSun Not The Last Merely The Latest
VeraSun Energy Corp, the largest publicly traded US ethanol company with 14 distilleries across eight states, said on Friday it was seeking bankruptcy protection.
It certainly isn't the first ethanol company to run into difficulties. Gateway Ethanol and Greater Ohio Ethanol both declared bankruptcy early last month.
Renova Energy LLC, a company that owns a partially built 20 million-gallons-per year ethanol plant in Idaho, declared bankruptcy in the summer, following Kansas-based Ethanex Energy Inc who declared bankruptcy in March.
So VeraSun becomes the largest and latest ethanol producer to run into trouble after corn and crude prices have halved from summer highs. It seems likely that there will be more casualties along the way, as US capacity is already higher than the government's mandate of 11.1 billion gallons for next year.
Pacific Ethanol shares are down 90 percent since their twelve month of $9.88 in December, and closed at one dollar Tuesday on Nasdaq. Shares of Aventine Renewable Holdings Inc, which closed on Tuesday at $2 on the New York Stock Exchange, have lost 85 percent of their value since hitting a 52-week high of $13.65 in December.
It certainly isn't the first ethanol company to run into difficulties. Gateway Ethanol and Greater Ohio Ethanol both declared bankruptcy early last month.
Renova Energy LLC, a company that owns a partially built 20 million-gallons-per year ethanol plant in Idaho, declared bankruptcy in the summer, following Kansas-based Ethanex Energy Inc who declared bankruptcy in March.
So VeraSun becomes the largest and latest ethanol producer to run into trouble after corn and crude prices have halved from summer highs. It seems likely that there will be more casualties along the way, as US capacity is already higher than the government's mandate of 11.1 billion gallons for next year.
Pacific Ethanol shares are down 90 percent since their twelve month of $9.88 in December, and closed at one dollar Tuesday on Nasdaq. Shares of Aventine Renewable Holdings Inc, which closed on Tuesday at $2 on the New York Stock Exchange, have lost 85 percent of their value since hitting a 52-week high of $13.65 in December.
