Central Illinois Energy to be auctioned March 20; bidders must top $80 million debt-for-asset swap proposal from Credit Suisse

In Illinois, the bankrupt Central Illinois Energy will hold an auction on March 20 to attract offers to top an $80 million debt-for-assets swap proposed by Credit Suisse Group, which holds $95 million in secured liens against the uncompleted 37 Mgy corn ethanol plant in Canton. Assets of the plant are listed at $0 million and debts at $141 million.

A federal judge has approved a sale process for the bankrupt Central Illinois Energy plant in Canton, while turning down an undisclosed Florida group who offered $25 million for the plant and equipment. The $80 million Whitebox offer is the only one that has not yet been rejected for the plant, which ran up costs of more than $130 million and was not completed.

Whitebox Advisors had made a credit bid of $80 million for the bankrupt Central Illinois Energy ethanol plant. The plant’s new owner will acquire technology problems, $22 million in mechanics’ liens, and a bill for $25 million to complete the plant.

Though the bid may bring the plant to fruition, 74 investors may lose up to $5 million in the Central Illinois Energy bankruptcy case. The CIE plant was proposed in 2001 at a cost of $40 million; construction was halted prior to completion when costs had reached $130 million and the company filed for Chapter 11 bankruptcy.

Central Illinois Energy put its 37 Mgy Canton, OH ethanol plant up for sale after failing to secure $30 million in additional funding. Credit Suisse, the lead bank among the lenders, reportedly forced the sale. Construction firms had filed $20 million in mechanic’s liens against the company after after non-payment of construction and engineering bills for the plant.

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