November 14, 2008 / 9:53 PM / 12 years ago

UPDATE 1-Ethanol producer Aventine delays two plants

*Aventine suspends construction at Aurora, Nebraska plant

*Delays completion of Mount Vernon, Indiana plant

*Will incur costs for redeploying personnel, equipment

LOS ANGELES, Nov 14 (Reuters) - Ethanol producer Aventine Renewable Energy Holdings Inc AVR.N said on Friday it would suspend construction at a Nebraska refinery and delay completion of another in Indiana to preserve cash and shore up its liquidity.

The move comes as ethanol distillers are getting squeezed between fluctuating corn costs and lower prices for their output, amid a glut of the biofuel.

In a statement, Aventine said construction at its Aurora, Nebraska 113 million gallon facility would be suspended for about six months. Aventine spokesman Les Nelson said the company did not have a date for when the project would be completed.

Meanwhile, the completion date for its Mount Vernon, Indiana plant is being extended to the fourth quarter of 2009 from the end of the first quarter, Nelson said. That facility is also expected to produce about 113 million gallons of ethanol annually.

The Pekin, Illinois-based company had warned previously that it might delay plant construction to boost its financial liquidity.

Aventine will incur costs for redeploying personnel and equipment, the company said.

“Our capital expansion program was the largest single user of cash, so slowing this program was the most prudent management alternative,” Aventine Chief Executive Ron Miller said in the statement.

Aventine shares closed down 17 percent at $1.11 on the New York Stock Exchange on Friday. (Reporting by Nichola Groom; Editing by Tim Dobbyn)

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