Spanish firm hopes to restart ethanol plants

Source: By Russell Hubbard, Omaha World Herald • Posted: Wednesday, March 2, 2016

The Spanish owner of the idled Nebraska ethanol plants in Ravenna and York that are the subject of bankruptcy filings is trying to get them restarted, while entertaining the prospect of selling them, according to a court hearing in Omaha on Tuesday.

Attorneys for the U.S. operations of Spanish energy giant Abengoa said the parent company of the Nebraska plants is attempting to secure a loan that will keep the Midwestern ethanol plants running in some capacity.

“It will then be determined if the plants will be sold,” said Craig Martin, an attorney for Abengoa, speaking in U.S. Bankruptcy Court in Omaha.

The Ravenna plant was thrown into involuntary bankruptcy last month after Omaha grain trader Gavilon said it was owed about $2.3 million for grain sales, and Ravenna’s Farmers Cooperative is owed $362,000. That filing asked the court to authorize the sale of plant assets to pay the bills.

But things are changing fast in the case. U.S. Bankruptcy Judge Thomas Saladino at the hearing Tuesday authorized that the case be converted from a liquidation to a reorganization. That will prevent creditors from securing a judge’s order authorizing the sale of assets and allow Abengoa to restart idled plants while restructuring its debts.

There are a lot of moving parts. At the top is Spanish parent Abengoa SA, which is in deep financial trouble, with about $10 billion of debt it has already told authorities in Europe it is having trouble paying.

Then there are the U.S. operations, which include ethanol and bioenergy plants in other states. A vast network of holding companies is involved, and the York plant is part of them and is already part of a Chapter 11 reorganization that bankruptcy Abengoa filed last month in U.S. Bankruptcy Court in St. Louis.

As for Gavilon and Farmers Cooperative of Ravenna, their travel budgets to keep up with the case just increased. Saladino also authorized that the Ravenna case in his court be transferred and combined with the St. Louis proceeding.

“The interests of justice demand this be done under one court,” Saladino said Tuesday.

Attorneys for creditors Gavilon and Farmers Cooperative argued in court that the plant had been in operation for 14 years until being idled, did about $90 million of sales a year and was profitable for most of its life. The lawyers said the creditors are worried that any cash generated by the plants will be swept off to Europe or elsewhere and not used to pay their claims, but Saladino said the same protections for creditors owed money exist in Missouri as they do in Nebraska.