VeraSun reportedly near bankruptcy

October 31, 2008 - Cleantech Group best of the web pick
Higher corn prices are potentially sinking one of the leading ethanol makers in the U.S.

Brookings, S.D.-based VeraSun Energy (NYSE: VSE) is planning to file bankruptcy protection, according to the Wall Street Journal.

VeraSun told lenders and bondholders after the close of markets today to prepare for the announcement. VeraSun has lined up $250 million in debtor-in-possession financing from Ableco, which could allow the company to continue operations as it restructures and
attempts to emerge from bankruptcy.

VeraSun has been one of the biggest ethanol producers in the U.S. since acquiring St. Paul, Minn.'s US BioEnergy (Nasdaq: USBE) in an all-stock deal (see VeraSun to buy US BioEnergy). But higher corn prices caused the company to report negative third quarter results, according to analyst Jeff Osborne of Thomas Weisel Partners.

In June, VeraSun delayed the start of a plant in North Dakota because of market conditions but opened its fourteenth facility in September in Iowa (see VeraSun starts up new ethanol plant and VeraSun delays startup of North Dakota biorefinery).

According to the report, sources close to the deal said it was possible the bankruptcy filing could be forestalled.

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Source: 
Wall Street Journal

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Comments

Financial shenanigans involved in VeraSun demise?

Submitted on November 1st, 2008 by Unregistered user (not verified)

Good post over at DeepCapture about the VeraSun naked short sales over the past year:
http://www.deepcapture.com/verasun-energy-failures-to-deliver-vs-share-price/

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