S.D.-based ethanol company expected to survive recent bankruptcy

Grand Forks Agweek
Published: 11/10/2008

SIOUX FALLS, S.D. — Ethanol producer VeraSun Energy Corp. says it has received commitments for as much as $215 million in debtor-in-possession financing to pay bills after filing for Chapter 11 bankruptcy protection Oct. 31.

AgStar Financial Services, based in Mankato, Minn., is posting the funds, in addition to certain holders of VeraSun’s secured notes.

A judge says VeraSun can borrow as much as $40 million from the financing to keep its doors open.

The company is in negotiations with other lenders to get a total of $250 million in financing.

VeraSun says it would not have been able to make payroll without help. The company says it also needs money to buy corn, natural gas, pay for leases and other costs.

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