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8-K - FORM 8-K - Advanced BioEnergy, LLC | c58578e8vk.htm |
Exhibit 99.1
10201 Wayzata Blvd, Suite 250 Minneapolis, MN 55305 P: 763.226.2701 F: 763.226.2725 TF: 866.794.5424 |
June 4, 2010
To All Unit Holders of Advanced BioEnergy, LLC
Dear Unit Holder,
I am pleased to report that we have successfully completed our private placement and are on the
verge of completing a restructuring of our South Dakota debt that will enable us to retain all of
our ownership in our South Dakota plants with a greatly reduced debt level. Your board believes
that completing the restructuring will significantly enhance the value of the company for all of
our unit holders and this is our highest priority.
Recent Miscommunications about Advanced BioEnergy
In the midst of this exciting news, I was very surprised to receive from one of our vendors a copy
of a letter apparently widely circulated by E Energy Adams (E Energy) that, for reasons entirely
unknown and unclear to us, was critical of Advanced BioEnergy. I only mention this because many of
you may have received a copy of this letter as well. We have received a letter today from E Energy
that acknowledges that the information contained in their letter was inaccurate and misleading and
apologizes for disseminating this information. We appreciate E Energys acknowledging this
miscommunication.
We also have reason to believe that misinformation is being circulated to both ABE unit holders and
others within the industry by a disgruntled former employee of ABE. We ask that you consider the
source of information that is being circulated about the company, and that you look to the
Companys SEC filings, our reports to unit holders, as well as the various meetings that we will be
setting up in the near future for the express purposes of addressing any concerns or questions
regarding ABE.
We plan to distribute an update on our company to each of you within the coming weeks and
will also be scheduling meetings (both online and in person at locations near you) in the near
future, for purposes of providing you with a full update on the status of our company and in which
we will specifically address any questions you have. Make no mistake, however, that we will not
allow these matters to distract us from the important work we have at hand or to deter us from
realizing what we see as extraordinary long term value growth ahead. We want to also take this
opportunity to give you a brief update on what is happening at our company.
Fairmont,
Nebraska Aberdeen, South Dakota Huron, South Dakota
Letter to Unit Holders
June 4, 2010
Page 2
June 4, 2010
Page 2
The Facts
While the facts are complicated, the story is simple. In October 2008 for reasons that I wont
detail here, but which weve gone into in great detail in our public filings and at our recent
annual meeting, this company was unfortunately on the verge of losing everything. We were in
default under our South Dakota loans and in default on our obligations to PJC Capital. These
obligations were secured by all of the companys plants in both South Dakota as well as Nebraska.
After an exhaustive process, your board determined that a management change was necessary. Since
then, we have focused on running our ethanol plants and avoiding spending any time, money or
efforts on matters not directly focused on our core operations.
We believe our strategy paid off. Thanks to the hard work of our employees and our customers and
suppliers, the company has experienced growth and profitability at a time when many other companies
in our industry faltered. Weve been able to pay off the PJC Capital note, are poised to
restructure our South Dakota financing arrangements in a way that will put the company on solid
footing with a real basis for success, and have had record financial results, with the companys
operating entities being cash flow positive for the past 19 months leading to a dramatic
improvement in liquidity in all aspects of our business.
The capital weve been able to raise from Hawkeye Energy Holdings was critical to our ability to
pay off debt obligations that were in default and are critical to the restructuring of our debt at
South Dakota. Without Hawkeyes investments, we simply would not have the opportunity we have
today and all unit holders will benefit from this. These investments were approved
unanimously by your independent directors, in each case after working with the companys financial
advisors and in conjunction with private placements in which all of the companys
accredited investors were invited to participate.
The Future
With the restructuring completed, we will be well-positioned to generate value for all of our unit
holders as we pay off debt of the company. Of course, there are risks associated with the ethanol
industry, but if the ethanol industry is viable the company should be well positioned. Our plants
are performing at consistently record levels, the Fairmont plant has an attractive financing
package and the restructured debt for our South Dakota plants will be arguably more favorable than
our Fairmont debt. We are very excited about where the company is today,
Fairmont,
Nebraska Aberdeen, South Dakota Huron, South Dakota
Letter to Unit Holders
June 4, 2010
Page 3
June 4, 2010
Page 3
particularly when we view
it from the perspective of where we were in October 2008. This has not been easy, but it is very
satisfying and your board and management team remain committed to making certain that all
investors will have the opportunity to benefit from this hard work.
Thank you for your investment and continued support, and look for further communication from us in
the near future. In the meanwhile, please dont hesitate to contact me directly if you have any
further questions or concerns regarding the matters raised in this letter, either by e-mail at
rpeterson@advancedbioenergy.com, or by direct dial at (763) 226-2701.
Sincerely, |
||||
Richard Peterson | ||||
Chief Executive Officer | ||||
Fairmont,
Nebraska Aberdeen, South Dakota Huron, South Dakota