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8-K - FORM 8-K - FIRST UNITED ETHANOL LLC | c11714e8vk.htm |
Exhibit 99.1
PRESS RELEASE | ||
Wednesday, February 2, 2011 | ||
CONTACT: | ||
FOR IMMEDIATE RELEASE: | Alicia Shirah | |
229-522-2822 |
Southwest Georgia Ethanol Files Chapter 11
First United Ethanol, LLC (FUEL) announced today that its wholly-owned subsidiary, Southwest
Georgia Ethanol, LLC, (SWGE or Company) has filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code in the U.S. Bankruptcy Court, Middle District of Georgia, Albany Division.
The Chapter 11 Case Number is 11-10145. A group of SWGEs secured bank lenders have agreed to
support the Companys on-going restructuring efforts with a $10 million debtor-in-possession
financing facility. The administrative agent for the secured bank lenders is WestLB AG, New York
Branch. The Company expects to conduct normal business operations while it reorganizes.
SWGEs filing results from liquidity constraints arising from operational problems that, while
largely resolved, impacted financial performance, the impending maturity of its working capital
facility, and from a lack of sufficient working capital due to increasing input costs and
decreasing prices as a function of the economy. The Chapter 11 reorganization will be used as a
vehicle to recapitalize SWGEs balance sheet.
FUEL and SWGE to Maintain Operations
FUEL has not filed for Chapter 11 bankruptcy protection. FUEL will continue to manage its
subsidiary, SWGE, as SWGE operates as a debtor-in-possession.
We are using this Chapter 11 filing as a tool to reorganize and protect the value of our business
for the long-term, said Murray Campbell, Chief Executive Officer of FUEL. We appreciate the
ongoing support we are receiving from our lender group and from our many trade partners with whom
we will continue to do business, he concluded.
During its Chapter 11, SWGE will continue to operate under court protection with FUELs employees
while working out a plan of reorganization to restructure its debt and pay its creditors. SWGE
expects that it will not scale back its purchases of inputs including corn. Under the Bankruptcy
Code, suppliers will be paid in full for all goods and services furnished after the Chapter 11
filing.
SWGE has engaged Morgan Keegan & Company, Inc. as its investment banker and financial advisor and
McKenna, Long & Aldridge LLP as debtors counsel to assist with the reorganization.
About FUEL and SWGE
Under servicing and maintenance and operations agreements with FUEL, SWGE began production in
October 2008 as the first 100 million gallon per year ethanol plant to be located in the Southeast.
SWGE grinds 36 million bushels of corn per year, purchasing 24% of its corn from local farmers.
SWGE ships more than 200 ethanol trucks per week within a 100 mile radius of the plant. SWGE
delivers over 300 grain trucks per week of dried distillers grains, a high quality feed ingredient
that is made from the remainder of the kernel of corn once the starch has been removed for ethanol
production. FUEL has more than five dozen full-time employees with an annual payroll of $5 million
in addition to hundreds of ancillary jobs that have bolstered the local economy. During the past
five years, SWGE has paid $5.4 million in property taxes, and since 2008, SWGE has purchased $33
million of natural gas through City of Camilla & MGAG, has purchased $6.5 million in electricity
from Georgia Power and has paid over $2.6 million of state sales tax on natural gas and
electricity.
Forward Looking Statements
This press release may contain statements which constitute forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the
intent, belief or current expectations of the Company, its directors, or its officers with respect
to the future operating performance of the Company and our success with respect to the construction
and operation of the Companys ethanol manufacturing facility. Investors are cautioned that any
such forward looking statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those in the forward looking
statements as a result of various factors. Important factors that could cause such differences are
described in the Companys periodic filings with the Securities and Exchange Commission.