Riverland Biofuels aims for $1.6 million in “lost” state grants as project resumes following bankruptcy

In Illinois, Central Illinois Energy has been renamed Riverland Biofuels and may be eligible for an additional $1.6 million in support from the state of Illinois. The state originally awarded a $4.5 million grant,. but suspended disbursement and initiated an investigation into spending of the grant money after Central Illinois filed for bankruptcy. At the time, $2.9 of the original grant had been disbursed.

The sale of Central Illinois Energy to Credit Suisse closed last month after a federal bankruptcy judge approved the sale. Credit Suisse and the Central Illinois Energy Cooperative had invested more than $90 million in the 37 Mgy plant since 2001, which requires up to $30 million more to complete construction. Central Illinois Energy Cooperative shareholders will lose all their money in the deal, which was opposed by Lurgi, the main contractor. Credit Suisse will pay $80 million in total for the project in the sale.

Last month, the bankrupt Central Illinois Energy will held a failed auction to attract offers to top an $80 million debt-for-assets swap proposed by Credit Suisse Group, which held $95 million in secured liens against the uncompleted 37 Mgy corn ethanol plant in Canton.
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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