NEW YORK (Reuters) - Wisconsin ethanol distiller Renew Energy LLC filed for chapter 11 bankruptcy protection on Friday as poor economics for making the alternative motor fuel and design flaws at its plant hurt the company, its chief executive said.
“Capital was already stretched as a result of start-up delays and operational problems that stemmed from numerous design flaws,” chief executive Jeff White said in release.
The private company, which has a 130 million gallon-per-year plant in Jefferson, Wisconsin, has obtained financing to continue to operate it at reduced rates, White said.
Renew is the latest in a string of delays, shutdowns and bankruptcy filings that have shut 5 percent of U.S. capacity to make ethanol since October. A big drop in oil prices amid soft demand for fuels has hurt the renewable fuels industry.
U.S. capacity to make ethanol is now about 10.6 billion gallons per year.
Renew has hired William Blair & Co. LLC to obtain additional financing, restructure the company’s balance sheet and explore a possible sale of the plant.
The company cut about 20 percent of its work force and reduced rates at the Wisconsin plant on January 5.
Reporting by Timothy Gardner, editing by John Picinich
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