Feeds

America's second largest ethanol producer goes titsup

Bill Gates was right, cornsarnit!

The Power of One Infographic

VeraSun Energy, the second-largest producer of corn-based ethanol in the United States has run out of money and filed for bankruptcy protection.

The South Dakota-based company said in a court filing on Monday that it wouldn't be able to make this week's payroll without help and also needs money to buy corn, natural gas, and pay its leases and other expenses.

Verasun lost $63m to $103m when attempting to hedge risks in the corn market, Bloomberg reports. This summer, VeraSun had agreed to purchase corn at a fixed price of $6.75 to $7 a bushel when Midwest flooding sent grain prices sky-rocketing.

But the flood damage wasn't as bad as anticipated, and combined with worldwide economic slowdown, corn futures settled back down to $4 a bushel.

The credit crisis also found VeraSun unable to secure funding needed to pay the interest on its debt.

"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," company CEO Don Endres said in a statement Friday.

In its SEC filing, VeraSun claims $3.45bn in assets and $1.91bn in debt.

Ethanol investments gained much of its legitimacy when the uber-nerd himself, Bill Gates bought a $84m stake in Pacific Ethanol in 2006. But the former Microsoft chief later started selling off the shares, taking a big financial hit to get the hell out of Dodge. ®

Eight steps to building an HP BladeSystem

More from The Register

next story
Malaysian Airlines flight MH17 claimed lives of HIV/AIDS cure scientists
Researchers, advocates, health workers among those on shot-down plane
The Sun took a day off last week and made NO sunspots
Someone needs to get that lazy star cooking again before things get cold around here
Mwa-ha-ha-ha! Eccentric billionaire Musk gets his PRIVATE SPACEPORT
In the Lone Star State, perhaps appropriately enough
MARS NEEDS OCEANS to support life - and so do exoplanets
Just being in the Goldilocks zone doesn't mean there'll be anyone to eat the porridge
Diary note: Pluto's close-up is a year from … now!
New Horizons is less than a year from the dwarf planet
Forty-five years ago: FOOTPRINTS FOUND ON MOON
NASA won't be back any time soon, sadly
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.