Australia’s Agri Energy halts trading in its shares, cites financing issues

February 13, 2008

In Australia, Agri Energy halted trading in its shares after collapse of its efforts to finance US expansions. The company, which abandoned plans for ethanol plants at Swan Hill and Murtoa, in Victoria, due to lack of government support and a poor outlook for feedstock and biodiesel prices. The company said it would continue to pursue financing in the US.

Agri Energy announced last month that it will sell its interests in Beatrice Biodiesel to a management group backed by Pangaea Technology Finance, for $42.5 million. In a note to shareholders, Agri Energy CEO Peter Anderton said that the company was selling its main asset to reduce debt while it reassesses its biofuels strategy in light of worldwide increases in feedstock prices. Under the agreement, the new ownership group has secured an additional $50 million in debt financing towards completion of the plant.

In November, Agri Energy sold its Swan Hill ethanol project in Australia to an undisclosed securities firm for $1 million. Agri Energy previously said they were shutting down development of the Swan Hill project and similar projects at Murtoa and Condobolin due to lack of support from the financial and policy sectors, and a transfer of company operations to the US.

Agri Energy said at the time that it will abandon Australia and make the US the base for its projects going forward. “The decision to put on hold any further development in the Australian biofuels industry is a result of current global biofuels market outlook, reflecting ongoing high feedstock prices and continued uncertainty from the investment community, government and community support for alternative transport fuels in Australia,” said chairman and CEO Peter Anderton.

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Written by Jim Lane · Filed Under International, Producer News