Otter Tail Ag Enterprises, which operates the Fergus Falls, Minn., ethanol plant, has six more weeks to come up with $12 million worth of capital, or face possible liquidation to resolve its debt problems.
The company filed for Chapter 11 bankruptcy in November 2009 and originally faced a deadline of Aug. 18 to either come up with the $12 million or a court-approved plan for a lesser amount, CEO Anthony Hicks said.
According to a statement from the company, Otter Tail Ag Enterprises raised about 75 percent of the $12 million by the August deadline.
Now, the company must start over in the additional time it has before Oct. 6, Hicks said.
The company had sought to gain the money through local investors, but Hicks said they're now seeking institutional investors in order to reach their goal and avoid having the plant go up for auction.
Throughout the process, the plant will continue to operate as normal for now, Hicks said.
The plant, which has 30 employees and can produce 55 million gallons of ethanol annually, continues to buy corn, make ethanol and sell distiller's grain, a byproduct of ethanol.
Otter Tail Ag Enterprises suffered significant losses in fiscal year 2009 and couldn't repay its $81 million in long-term debt under current terms and conditions, Hicks said in November 2009, when filing for Chapter 11 bankruptcy would have given the company more time to work out its financial problems.
Like most ethanol plants nationwide, the Fergus Falls plant, which opened in 2008, was hurt by rising corn prices, falling gasoline prices and the national recession.