March 26, 2008

US ethanol firm files for bankruptcy

Two-year-old ethanol company Ethanex Energy Inc. (EHTE) of Basehor, Kansas is planning to file for bankruptcy after being unable to gain interim financing.

Ethanex said in a federal filing Monday that it has ceased operations, cut its staff to three and expects to file for bankruptcy protection soon.

It also ended an agreement to buy a Nebraska ethanol plant owned by Midwest Renewable Energy for US$50 million. Ethanex said it had been unable to raise the US$1.5 million in interim financing it needed.

Ethanex first mentioned bankruptcy as a possibility when it detailed its financial problems in a March 12 filing. The company had originally planned to build three ethanol plants, each capable of producing 110 million gallons of the fuel additive annually.