VeraSun Energy Corporation Launches Chapter 11 Case to Enhance Liquidity While It Reorganizes
01 11월 2008 - 11:00AM
PR Newswire (US)
Production Facilities Expected to Continue Operations SIOUX FALLS,
S.D., Oct. 31 /PRNewswire-FirstCall/ -- VeraSun Energy Corporation
(NYSE:VSE), one of the nation's largest ethanol producers announced
today the Company and 24 of its subsidiaries have filed voluntary
petitions for relief under chapter 11 of the U.S. Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware
to enhance liquidity while they reorganize. The filing was
precipitated by a series of events that led to a contraction in
VeraSun's liquidity, impairing its ability to operate its business
and invest in production facilities. The Company suffered
significant losses in the third quarter of 2008 from a dramatic
spike in its corn costs, reflecting in part costs attributable to
its corn procurement and hedging arrangements, and historically
unfavorable margins. Beginning in the third quarter, worsening
capital market conditions and a tightening of trade credit resulted
in severe constraints on the Company's liquidity position. Faced
with these constraints, VeraSun and 24 of its subsidiaries filed
their chapter 11 petitions to facilitate access to additional
liquidity while they reorganize to take better advantage of
VeraSun's position as one of the nation's largest producers of
ethanol. Company Intends To Maintain Operations During the chapter
11 proceedings, VeraSun plans to resume normal operations. The
Company has taken steps to ensure continued supply of product to
its customers and to fulfill all customer obligations. In that
regard, VeraSun is working closely with its lenders and expects to
reach an agreement before the "first day" hearing on Monday for
additional committed financing to provide adequate liquidity to
fund operations in the normal course. The Company expects that it
will not scale back its purchases of raw materials, and corn and
other suppliers will continue to be paid in full for all goods and
services furnished after the filing date as required by the
Bankruptcy Code. The Company has also sought authority from the
bankruptcy court to pay for goods delivered to the Company on or
after October 11, 2008. VeraSun has also requested the bankruptcy
court's approval to continue to pay employees in the ordinary
course without interruption, and expects the request to be granted
as part of the court's "first day" orders. "Today's filing allows
VeraSun to address its short-term liquidity constraints as we
navigate historically challenging market conditions while we focus
on restructuring to address the company's long-term future," Don
Endres CEO said. "We appreciate the loyalty of our employees,
customers and suppliers during this challenging time." About
VeraSun Energy Corporation VeraSun Energy Corp. (NYSE:VSE),
headquartered in Sioux Falls, S.D., is a leading producer and
marketer of ethanol and distillers grains. Founded in 2001, the
company has a fleet of 16 production facilities in eight states, of
which one is still under construction. VeraSun Energy is scheduled
to have an annual production capacity of approximately 1.64 billion
gallons of ethanol and more than 5 million tons of distillers
grains by the end of 2008. VeraSun also markets E85, a blend of 85
percent ethanol and 15 percent gasoline for use in Flexible Fuel
Vehicles (FFVs), directly to fuel retailers under the brand
VE85(R). For more information, please visit VeraSun Energy's
websites at http://www.verasun.com/ or http://www.ve85.com/.
Forward-Looking Statements This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In particular,
statements by VeraSun and its subsidiaries (the "Company")
regarding future events and developments and the Company's future
performance, including statements regarding proceedings relating to
the Company's petitions for relief under Chapter 11 of Title 11 of
the United States Code and the Company's operations and funding
during the chapter 11 process, as well as other statements of
management's expectations, anticipations, beliefs, plans,
intentions, targets, estimates, or projections and similar
expressions relating to the future, are forward-looking statements
within the meaning of these laws. Forward-looking statements in
some cases can be identified by their being preceded by, followed
by or containing words such as "estimate," "plan," "project,"
"forecast," "intend," "expect," "anticipate," "believe," "seek,"
"target" and other similar expressions. Forward-looking statements
are based on assumptions and assessments made by the Company's
management in light of their experience and their perception of
historical trends, current conditions, expected future developments
and other factors they believe to be appropriate. Any
forward-looking statements are not guarantees of the Company's
future performance and are subject to risks and uncertainties that
could cause actual results, developments and business decisions to
differ materially from those contemplated by any forward-looking
statements. Except as required by law, the Company undertakes no
obligation to update any forward-looking statements. Some of the
factors that may cause actual results, developments and business
decisions to differ materially from those contemplated by any
forward-looking statements include the following: the ability of
the Company to continue as a going concern; the ability of the
Company to obtain debtor-in-possession financing and to operate
pursuant to the terms of any debtor-in-possession financing; the
Company's ability to obtain court approval with respect to motions
in the chapter 11 proceeding prosecuted by it from time to time,
including approval of motions relating to the priority of the
lender's security interest under any debtor-in-possession
financing; the ability of the Company to develop, prosecute,
confirm and consummate one or more plans of reorganization with
respect to the chapter 11 cases; risks associated with third
parties seeking and obtaining court approval to terminate or
shorten the exclusivity period for the Company to propose and
confirm one or more plans of reorganization, for the appointment of
a chapter 11 trustee or to convert the cases to chapter 7 cases;
the ability of the Company to obtain and maintain normal terms with
vendors and service providers; the Company's ability to maintain
contracts that are critical to its operations; the potential
adverse impact of the chapter 11 cases on the Company's liquidity
or results of operations; the ability of the Company to fund and
execute its business plan; the ability of the Company to attract,
motivate and/or retain key executives and employees; the ability of
the Company to attract and retain customers; the volatility and
uncertainty of corn, natural gas, ethanol, unleaded gasoline and
other commodities prices; the Company's ability to generate
sufficient liquidity to fund its operations and capital
expenditures; the results of the Company's hedging transactions and
other risk mitigation strategies; risk of potential goodwill and
other intangible impairment; operational disruptions at the
Company's facilities; the effects of vigorous competition and
excess capacity in the industries in which the Company operates;
the costs and business risks associated with developing new
products and entering new markets; the development of
infrastructure related to the sale and distribution of ethanol; the
effects of other mergers and consolidations in the biofuels
industry and unexpected announcements or developments from others
in the biofuels industry; the uncertainties related to the
Company's acquisitions of US BioEnergy Corporation, ASA OpCo
Holdings, LLC and other businesses, including the Company's ability
to achieve the expected benefits from these acquisitions; the
impact of any new, emerging and competing technologies on the
Company's business; the possibility of one or more of the markets
in which the Company competes being impacted by political, legal
and regulatory changes or other external factors over which the
Company has no control; changes in or elimination of governmental
laws, credits, tariffs, trade or other controls or enforcement
practices; the impact of any potential Renewable Fuel Standards
waiver; the Company's ability to comply with various environmental,
health, and safety laws and regulations; the success of the
Company's marketing and sales efforts; the Company's reliance on
key management personnel; the Company's ability to secure
additional financing; the volatility of the market price of
VeraSun's stock; the Company's ability to implement additional
financial and management controls, reporting systems and procedures
and continue to comply with Section 404 of the Sarbanes-Oxley Act,
as amended; and the risk factors described in VeraSun's filings
with the Securities and Exchange Commission, including the
prospectus supplement filed on September 16, 2008. Similarly, these
and other factors, including the terms of any reorganization plan
ultimately confirmed, can affect the value of the Company's various
pre-petition liabilities and VeraSun's common stock. No assurance
can be given as to what values, if any, will be ascribed in the
chapter 11 proceeding to each of these constituencies. Accordingly,
the Company urges that the appropriate caution be exercised with
respect to existing and future investments in any of these
liabilities and/or securities. VeraSun Contacts: Media: Mike
Lockrem 605-978-7055 Investors: Patty Dickerson 605-978-7137
DATASOURCE: VeraSun Energy Corporation CONTACT: Media, Mike
Lockrem, +1-605-978-7055, , or Investors, Patty Dickerson,
+1-605-978-7137, , both of VeraSun Energy Corporation Web site:
http://www.verasun.com/ http://www.ve85.com/
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