Pacific Ethanol, Inc. (Nasdaq: PEIX) has signed a commitment letter providing for up to $325 million of senior secured credit. The loan facility will include up to $300 million in a senior secured construction and term debt facility, which will be used to recapitalize the Company’s Madera California ethanol plant, to provide take-out financing on the completion of the Company’s Boardman Oregon ethanol plant, and to provide both construction and term financing for three additional ethanol plants that the Company has under development. In addition, the loan will include a working capital and letter of credit facility of up to $25 million.
The commitment letter represents a fully-underwritten commitment from WestLB AG, New York Branch, the joint lead arranger, sole book manager and administrative agent, and Mizuho Corporate Bank, Ltd., the joint lead arranger and syndication agent. The closing of the loan facility, which is subject to final documentation and a number of contingencies, is expected to occur in the first quarter of 2007.
CEO Neil Koehler observed that, “This facility will give Pacific Ethanol full financing to exceed the first phase of our growth plan, which has been to attain annual production capacity of 220 million gallons per year by the middle of 2008. We will break ground on the next three plants by the end of the first quarter of 2007. We continue to execute well on our business plan to be the leading producer of ethanol in the Western United States and are proud to be partnering with WestLB and Mizuho in the exciting growth of our company.”
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