PEKIN, Ill., June 13, 2008 (PRIME NEWSWIRE) -- Aventine Renewable Energy Holdings, Inc. (NYSE:AVR), a leading producer, marketer and end-to-end provider of clean renewable energy, today announced that it has sold all of the auction rate securities it previously held.
The Company sold $127.2 million par value of student loan-based auction rate securities to various parties for cash totaling approximately $97.1 million. In its first quarter ended March 31, 2008, the Company had recorded an impairment charge of $21.6 million related to the remaining auction rate securities it held at March 31, 2008. As a result of the recent sales, the Company will now record an additional loss on the sale of these securities of $8.5 million in the second quarter of 2008.
Ronald H. Miller, Aventine's President and Chief Executive Officer said, "The funds received from the sale of the auction rate securities will be used to fund plant construction, which remains an integral part of our growth strategy. We expect to begin ethanol and DDGS production at our new Aurora, Nebraska and Mt. Vernon, Indiana plants, currently under construction, in the first quarter of 2009 as scheduled."
With the cash raised from the sale of the auction rate securities, and including both cash on hand and borrowing availability under its liquidity facility as of March 31, 2008, the Company would have had liquidity available to it in excess of $300 million. As of March 31, 2008, the Company needed approximately $250 million to complete its two new production facilities. In addition, the Company is continuing discussions with banks to increase the amount of liquidity available to it under a revolving asset-based loan facility. Existing debt agreements permit the Company to increase its senior credit facilities by another $75 million, potentially further strengthening the Company's liquidity position.
About Aventine
Aventine is a leading producer, marketer and end-to-end distributor of ethanol to many leading energy companies in the United States. Aventine is also a marketer and distributor of biodiesel. In addition to ethanol, Aventine also produces distillers grains, corn gluten feed, corn germ and brewers' yeast. Our internet address is www.aventinerei.com.
Forward Looking Statements
Certain information included in this press release may be deemed to be "forward looking statements" within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release, are forward looking statements. Any forward looking statements are not guarantees of Aventine's future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward looking statements. Aventine disclaims any duty to update any forward looking statements. Some of the factors that may cause Aventine's actual results, developments and business decisions to differ materially from those contemplated by such forward looking statements include the following:
* Changes in or elimination of laws, tariffs, trade or other controls
or enforcement practices such as:
-- National, state or local energy policy;
-- Federal ethanol and biodiesel tax incentives;
-- Regulation currently proposed and/or under consideration which
may increase the existing renewable fuel standard and other
legislation mandating the usage of ethanol or biodiesel;
-- State and federal regulation restricting or banning the use of
Methyl Tertiary Butyl Ether;
-- Environmental laws and regulations applicable to Aventine's
operations and the enforcement thereof;
* Changes in weather and general economic conditions;
* Overcapacity within the ethanol, biodiesel and petroleum refining
industries;
* Total United States consumption of gasoline;
* Availability and costs of products and raw materials, particularly
corn, coal and natural gas;
* Labor relations;
* Fluctuations in petroleum prices;
* The impact on margins from a change in the relationship between
prices received from the sale of co-products and the price paid for
corn;
* Aventine's or its employees' failure to comply with applicable laws
and regulations;
* Aventine's ability to generate free cash flow to invest in its
business and service any indebtedness;
* Limitations and restrictions contained in the instruments and
agreements governing Aventine's indebtedness;
* Aventine's ability to raise additional capital and secure
additional financing, and our ability to service such debt, if
obtained;
* Aventine's ability to retain key employees;
* Liability resulting from actual or potential future litigation;
* Competition;
* Plant shutdowns or disruptions at our plant or plants whose
products we market;
* Availability of rail cars and barges;
* Potential decreases in marketing alliance volumes resulting from
the acquisition of marketing alliance partners by our competitors,
the reduction of production capacity or abandonment of announced
projects by marketing alliance partners for economic reasons, the
creation of similar marketing alliances by our competitors and other
failures to renew marketing alliance contracts;
* Our ability to receive and/or renew permits to construct and/or
commence operations of our proposed capacity additions in a timely
manner, or at all; and
* Fluctuations in earnings resulting from increases or decreases in
the value of ethanol or biodiesel inventory