Shares of Pacific Ethanol, Inc. (Nasdaq: PEIX) were up almost 60 percent from Tuesday’s close in morning trading on Wednesday, after the company said that four of its wholly-owned subsidiaries had emerged from bankruptcy.
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“We believe that our business is well positioned for growth,” said Pacific Ethanol president and CEO, Neil Koehler in a statement. “With the California plants capable of producing the lowest carbon ethanol in the United States, we are now focused on a plan to restart these facilities to provide much needed ethanol to meet California’s Low Carbon Fuel Standard.”
The plant subsidiaries, which are now owned by a newly formed holding company, will continue to be staffed, managed and operated by Pacific Ethanol under a fee and profit-sharing arrangement negotiated with the owners of the newly formed holding company.
Pacific Ethanol, Inc. eliminated approximately $290 million in debt and other liabilities from its balance sheet. The bankruptcy did not affect the Company’s ownership structure and the Company continues to be owned by its existing common and preferred stockholders. The Company also has an exclusive option to purchase up to a 25 percent equity interest in the new holding company for up to $30 million in cash, which is exercisable for a period of 90 days from June 29, 2010.