Otter Tail Ethanol, Fergus Falls, Mn, the Ethanol plant with the 13th planned COES (in the last COES update), which was planned to be commissioned by 30 November 2009, has entered into a forbearance agreement. What that means is they requested and got some temporary relief from payments to their lenders. .
"To assist with relief of debt service payments and compliance with certain other covenants during the period of continued discussions with the Lender Group, the Company now has in place a forbearance agreement which includes deferment of principal and interest payments until May 1, 2009. The Company continues to evaluate the proposed equity offering documents and conditions, much of which is tied to the discussions with the Lender Group. The State of Minnesota has recently requested that certain references in the offering document be modified and has asked for additional information. This will require the Company to update the business plan and the offering materials to address the additional requests."
Here is the Newsletter
Here is the 8-K with more details,
Like many in the biofuels industry, they are having cash flow problems. The SkunK has already reported on the bankruptcy and pending auction of the Fulton Ny plant. My April 1st blog mentioned the covenant violations at RTE. The low fuel prices at the gas pump continues to hammer ethanol.
The biodiesel industry also continues to stagger, being hit with low demand, European Union tarriffs and absent margins.
SkunK
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