LONDON (Thomson Financial) - Renova Energy Plc. said it has limited
financial resources with which to continue as a going concern, and so it is
continuing to explore other financing and strategic options.
The ethanol producer said although it has agreed terms with its lenders for
the provision of additional new working capital facilities of $4 million in
aggregate for its U.S. operations, this does not extend to funding Renova Energy
Plc, the parent company.
Renova said with this funding in place, its U.S. subsidiaries have
voluntarily filed for Chapter 11 bankruptcy protection as the next step in the
financial restructuring process.
In addition, Renova said it is still in talks with the creditors of Renova
Energy, which owns its partly constructed ethanol facility in Idaho. Talks with
other interested parties, including potential purchasers, are still ongoing, it
added.
Chairman Chris Thomas said that despite the group's financial difficulties,
which were caused by project cost overruns on the Idaho plant, its existing
business continues to grow and to generate positive cashflow.
Shares in Renova were suspended on May 20 pending clarification of its
financial position.
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