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Apr 13, 2009 -

Ethanol Production Operations Will Continue Uninterrupted.

The best  laid plans don’t always produce the desired results.  It wasn’t too long ago that some prognosticators were having all cars running on more and more ethanol.  Here is some bad news for those seers.

Aventine Renewable Energy Holdings, Inc. (OTC: AVRN), recently announced that it and its subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. The Company and certain holders of its 10.0% senior unsecured notes have agreed to a first priority secured debtor-in-possession (“DIP”) term loan totaling $30 million that will enable the Company to continue to satisfy customary obligations associated with its ongoing operations. The DIP loan provided by certain bondholders will provide the Company with new liquidity permitting it to maintain normal operations and allow the Company and its creditors to jointly plan for the future.  The ethanol industry currently suffers from poor operating margins as a result of supply exceeding existing demand, including the 2009 renewable fuels standard mandate. Ethanol demand has been negatively affected by low gasoline prices which has all but eliminated the discretionary consumption of ethanol. Ethanol demand has also been negatively affected by refiners and blenders using excess renewable identification numbers (“RINS”) to help meet their renewable fuels standard obligations instead of purchasing actual gallons of ethanol. Ron Miller, Aventine’s President and CEO said, “I am pleased with the support shown by our bondholders and their vision for the future of Aventine. Aventine remains a business with strong potential, a committed group of employees, a recognized brand name and a proud heritage. We are also a company that is challenged by the difficult market environment for ethanol producers. After careful consideration of all available alternatives, the Company determined that filing for Chapter 11 was a necessary and prudent step that allows us to operate our business without interruption. We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential investors, and definitively resolve our debt issues. Aventine is one of the most widely recognized names in our industry with strong market share.” Miller continued, “The ethanol industry has sound long-term prospects, and we anticipate a strong rebound as the government imposed biofuels mandate continues to increase and the supply of excess RINS are consumed. We are taking steps to ensure our business will be ready when the current markets turn up again. The vast majority of our suppliers will not see any disruptions in their business dealings with us.”

Aventine has filed first day motions that ask the Court to approve, among other things, payment of employee wage and benefit charges that were incurred before the petition was filed, and the continuation of cash management systems.

Aventine is a leading producer and marketer of ethanol to many leading energy companies in the United States. In addition to ethanol, Aventine also produces distillers grains, corn gluten meal, corn gluten feed, corn germ and brewers’ yeast. Our internet address is www.aventinerei.com.