NEW YORK (Reuters) – Aventine Renewable Energy Holdings Inc (AVRN.PK), a maker of corn ethanol, has filed for Chapter 11 bankruptcy protection, after suffering from declining liquidity and margins.
The Pekin, Illinois-based company and six affiliates filed for protection from creditors on Tuesday with the U.S. bankruptcy court in Wilmington, Delaware. It said it had $799.5 million of assets and $490.7 million of debts at year-end .
In a court filing, Chief Accounting and Compliance Officer William Brennan said Aventine faced declining liquidity amid frozen credit markets, in part because of a large investment in auction-rate securities.
He also said Aventine was hurt by narrowing spreads between ethanol and corn prices. Brennan said gross margins have been negative since mid-2008 in part because of fixed obligations to buy corn and natural gas at above-market prices.
In late October, Aventine’s larger rival VeraSun Energy Corp (VSUQE.OB) also filed for bankruptcy protection.
The case is In Re Aventine Renewable Energy Holdings Inc, U.S. Bankruptcy Court in Delaware (Wilmington), No. 09-11214. (Reporting by Jonathan Stempel; Editing by Steve Orlofsky)
peHUB Note: Morgan Stanley Capital Partners bought Aventine in 2003, and its affiliates (now managed by Metalmark Capital) still hold a 28% stake.