* Six-month bridge loan matures on March 24, 2011
* To also conduct $40 mln rights offering
* Shares rise as much as 58 percent
Sept 27 (Reuters) - Ethanol maker BioFuel Energy Corp BIOF.O said it got a six-month bridge loan of $19.4 million from Greenlight Capital Inc and an affiliate of Third Point LLC, sending its shares up 58 percent.
The company said the proceeds from the bridge loan were primarily used to repay $17.9 million in working capital loans under its senior debt facility.
The bridge loan, which bears an interest rate of 12.5 percent, matures on March 24, 2011.
BioFuel added it also entered into an agreement with Greenlight and Third Point to conduct a $40 million rights offering.
Under the offering, all holders of BioFuel shares will be given the right to buy up to four million of the company’s convertible preferred stock at $10 per share. This is expected to generate proceeds to repay the bridge loan, BioFuel Energy LLC’s subordinated debt and make some other payments.
As of April, Greenlight Capital, whose president David Einhorn is one of BioFuel’s directors, owned about 36.4 percent of the company’s outstanding common stock. Third Point Funds owned about 17.8 percent.
As of June, BioFuel had long-term debt of $221.3 million — over five times its market value — and just over $12 million of cash on its balance sheet.
The company’s shares, which have fallen 62 percent from an 18-month high of $4.40 in early January, rose 58 percent to $2.65 Monday morning. The stock later pared some gains to trade at $2.31, and was among the highest percentage gainers Monday morning on Nasdaq. (Reporting by Adveith Nair in Bangalore; Editing by Roshni Menon)