Aventine Renewable Energy Holdings Inc., a U.S. based corn ethanol producer, filed for Chapter 11 bankruptcy in the District of Delaware on Wednesday due to shrinking profit margins.
The Pekin, Illinois-based company said ethanol production operations will continue uninterrupted, because it has a debtor-in-possession term loan totaling $30 million. Aventine listed assets of $799 million with $491 million in debt.
We are also a company that is challenged by the difficult market environment for ethanol producers, said Ron Miller, the Chief Executive officer of the company who also added that the ethanol industry has sound long-term prospects, and anticipated a strong rebound as the government imposed biofuels mandate continues to increase and the supply of excess RINS are consumed.
Aventine went public in 2006. Last month the company warned that it was likely to file for bankruptcy if it didn't get enough cash.
Corn ethanol is used as a fuel. Its usage was boosted a few years ago when government regulations encouraged companies to lower their dependence oil.