Friday, December 14, 2007

Canton Illinois Ethanol Plant Goes Broke

An unfinished ethanol plant at Canton, Illinois is broke and filing for bankruptcy:

FULTON COUNTY -- When it comes the ethanol plant near Canton, the weather is indicative of the mood there -- cold and dreary. The facility isn't finished, employees are laid off, and bankruptcy may be looming. But it's not all doom and gloom.The wind howls more sharply when a plant is empty of action. But like spring itself, "hope" is eternal. There are people who specialize in turnarounds -- and they're focused hard on this plant.It's a pretty sad scene. This was to be the place of great profits from the "ethanol boom." Not only is it not completed, it's way over budget, and millions in liens have been filed against it. Yet, amongst the clouds,
sunshine exists.

There are investors working to finish the plant, but they have some obstacles to over come:

Another obstacle is the plant's size - significantly smaller than other plants in the state, Barash said. Other plants can produce 100 million gallons annually, and CIE's capacity is 37 million gallons.
Now the plant is unfinished, with about $130 million invested. Barash said it will take about $25 million more to finish it, which he and the rest of the management team are working on borrowing.
"They're too far along," Barash said. "They're going to have to complete it."
But the finished value will not be $155 million, and Barash said the losers will be the farmers who invested in the project, those who extended lines of credit and the banks that provided financial backing.
The value may be roughly $2 per gallon of ethanol the plant produces annually, Barash said, which is less than half the ultimate construction cost.

This disaster is also part of the Illinois Dept. of Agriculture seizing a grain broker license:

The state has seized about $6 million worth of grain held in bins in central Illinois.
Illinois Department of Agriculture spokesman Jeff Squibb says it's suspending the Central Illinois Grain company's license for technical violations, including not having regular office hours. Squibb says the seizure will freeze the company's assets and protect farmers who supplied the grain.

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