BioFuel Energy releases Q2 financial results

By Erin Voegele | August 15, 2013

BioFuel Energy Corp. has released its financial results for the second quarter of 2013, reporting a net loss of $4.7 million on revenues of $91 million. During the same three-month period of 2012, the company posted a $12.4 million net loss on revenues of $122.8 million. BioFuel Energy owns the 115 MMgy Pioneer Trail ethanol plant in Wood River, Neb., and the 115 MMgy Buffalo Lake ethanol plant in Fairmont, Minn.

In its financial release, BioFuel Energy announced that the grace period provided under its previously disclosed lender agreement, dated April 11, expired on July 30. According to BioFuel Energy, it has received indications of interest from several parties with respect to one or both of its plants. However, no party has offered to acquire one or both of the plants on terms that would result in meaningful residual proceeds accruing to the company.

The Buffalo Lake plant was idled in September 2012 following a missed $3.6 million debt payment. In late March, BioFuel Energy announced it has enlisted Piper Jaffray & Co. to act as its financial advisor, with the goal of exploring strategic alternatives. This includes the sale of one or both ethanol plants.

A quarterly report filed with the U.S. Securities and Exchange Commission elaborates, noting that the company’s operating subsidiary received a notice of default from First National Bank of Omaha, the administrative agent for the lenders under the senior debt facility, following the September 2012 missed payments. Since that initial default, the operating subsidiaries have not made the regularly-scheduled principal and interest payments, which totaled $17.6 million on June 30.

Within the SEC filing, BioFuel Energy states that the operating subsidiaries entered into a lender agreement with First National Bank of Omaha on April 11, which provided the operating subsidiaries with a grace period through July 30. The grace period was intended to allow the company to pursue strategic alternatives, such as a sale of the ethanol plants, and could be extended under the discretion of administrative agent, First National Bank of Omaha.

In its Aug. 13 press release, BioFuel Energy indicated that it had received notice from the administrative agent on June 17 asserting that a release event, as defined in the lender agreement, had occurred. However, BioFuel Energy said that as of Aug. 13, the administrative agent had not yet formally extended the grace period, or taken the steps necessary to compete the transfer of its operating assets. As such, BioFuel Energy said it is continuing to engage in discussions regarding a potential consensual transfer of its plants, and is evaluating the possibility of obtaining other sources of financing that would allow the operating subsidiaries to retain one or both plants. Additional information is available in BioFuel Energy’s second quarter 2103 SEC filing