* Aventine warns may need to seek bankruptcy protection
* Posts quarterly loss, says in default of some debt
* Shares extend losses after hours
* Verenium receives going concern qualification
(Adds details on Verenium going concern qualification)
NEW YORK, March 16 Corn ethanol maker Aventine
Renewable Energy Holdings Inc AVR.N said on Monday it was in
default on some its debt payments and may need to seek Chapter
11 bankruptcy protection.
The company said it was seeking to raise capital,
"including seeking additional debt and equity financing and a
potential sale of all or part of the company," but that it
could seek bankruptcy protection soon if it those efforts were
Also on Monday, cellulosic ethanol maker Verenium Corp's
VRNM.O auditors questioned its ability to continue as a going
The news from both Aventine and Verenium comes
four-and-a-half months after their larger peer, VeraSun Energy
Corp VSUNQ.OB, filed for bankruptcy protection.
The margins to produce ethanol have been squeezed by weaker
gasoline prices, despite U.S. government mandates requiring
gasoline blenders to buy the biofuel.
Aventine, which also reported a fourth quarter loss of
$36.9 million, or 86 cents per share, compared to a profit of
$3.3 million, or 8 cents per share, a year earlier, said it did
not have the cash to make a $15 million interest payment due
April 1 or the $24.4 million it owes builder Kiewit Energy Co.
Kiewit built some ethanol-producing plants for Aventine.
Aventine, based in Pekin, Illinois, is in default on $300
million in 10 percent fixed-rate notes because of the money it
owes Kiewit. That default would allow holders of the $300
million in debt to accelerate payments to them upon 60 days
Kiewit canceled is contracts with Aventine after the
ethanol maker missed a Dec. 31 payment. Aventine said it hoped
to negotiate a payment settlement.
"We cannot give you any assurance that we will reach an
agreement with Kiewit that works within our existing liquidity
constraints," the company said in a statement.
As of March 12, Aventine had $700,000 in cash and $6.6
million in borrowing capacity under its current facilities.
Meanwhile, Verenium's outside auditor, Ernst & Young, said
in a U.S. Securities and Exchange Commission filing that the
company's working capital deficit of $23.8 million and
accumulated deficit of $622.6 million as of Dec. 31 "raise
substantial doubt about its ability to continue as a going
In its quarterly SEC filing, Verenium said it may need
additional sources of cash or the reduction or elimination of
planned expenditures to fund its operating expenses, capital
spending, debt payments and working capital requirements
through Dec. 31 of this year.
Verenium produces ethanol from nonfood feedstocks such as
agricultural waste and wood products. It formed a joint venture
with BP Plc (BP.L) to develop cellulosic ethanol last month.
Verenium shares closed at 39 cents Monday on the Nasdaq.
Shares in Aventine fell to 12 cents per share in after-hours
trading after closing down 9.7 percent at 28 cents on the New
York Stock Exchange.
(Reporting by Matt Daily; editing by Toni Reinhold and Andre