Ohio ethanol plant going through foreclosure, restart possible
A long-idle ethanol plant in Coshocton, Ohio, may have a chance at new life again after bondholders initiated the foreclosure process. Once complete, the 60 MMgy ethanol plant could be sold to new owners. “The prospective buyers of the new plant have been in contact with the City of Coshocton and have informed the City that they could possibly re-open the plant in 2012, but no later than the spring of 2013,” said Robert Skelton, law director for the city. “The new plant will likely employ approximately 40 people and should be able to operate profitably.”
Coshocton Ethanol LLC began operating in February 2008 and only produced ethanol for a few months before shutting down. The facility was built with funding from the State of Ohio and private equity in the form of bonds, Skelton said in a prepared statement. The city took out a $7 million loan from the Ohio Water Development Authority for water and waste treatment upgrades, 70 percent of which the ethanol plant had agreed to pay back.
In an effort to force a bankruptcy, foreclosure or plant sale, the City of Coshocton filed a lawsuit against Coshocton Ethanol, which was resolved recently. A judgment granted the city the amount it was owed to-date and Coshocton Ethanol voluntarily agreed to it rather than going to trial. The city isn’t likely to receive any money out of the foreclosure process, Skelton said, adding that secured bond holders are the first debt holders.
It’s good news, however, that the plant could be sold to new owners once foreclosure proceedings wrap up. Getting the plant up and running again would be an economic plus for that area. Although the ethanol plant isn’t located in the city limits it is in a joint economic development area, meaning Coshocton would be entitled to a percentage of tax revenue generated by the plant, Skelton told EPM.
The Coshocton Port Authority is another local entity that has long hoped the ethanol plant would restart. “It’s important to the economic development of our rural community,” said Dorothy Skowrunski, executive director of the port authority, which owns 14.5 acres of land that houses an electric substation and waste pump station for the ethanol plant.
The port authority had a lease-to-own agreement with Coshocton Ethanol and is open to a similar agreement with the new owner. Repayment of a $500,000 loan from the Ohio Department of Development loan was scheduled to begin in 2011 but the state granted an extension because Coshocton Ethanol is in default on its lease payments.
Altra Biofuels, a San Diego, Calif.-based company, owned the ethanol plant at one time. Skelton identified C.E. Acquisition Co. as the bondholders forcing the restructuring. Neither company responded to requests for additional information.