VeraSun Energy Corp. is on the verge of landing a $30 million bankruptcy loan from WestLB AG, financing it says it needs to ward off an immediate shutdown of three ethanol production facilities, new court documents say.
Final terms still are being hammered out, VeraSun said in papers filed Wednesday in the U.S. Bankruptcy Court in Wilmington, Del. The embattled ethanol producer, however, expects to have a signed deal in hand in time for a hearing on Monday.
Without the WestLB loan, VeraSun said, it "will have no choice but to immediately discontinue operations" at three ethanol plants -- in Indiana, Nebraska and Ohio -- that it acquired in 2007.
Tim Pohl, VeraSun's lead bankruptcy lawyer, said in an e-mail Thursday that the proposed loan from WestLB is in addition to other loans already approved by the bankruptcy court.
VeraSun, based in Sioux Falls, S.D., filed for Chapter 11 protection Oct. 31. The nation's largest publicly traded ethanol producer quickly put together financing arrangements with existing lenders that added up to about $250 million.
The company has delayed starting production at a plant in Welcome, Minn., because of market conditions. Construction of a second Minnesota plant, in Janesville, was halted this week after the bankruptcy filing.
DOW JONES NEWS SERVICE
