SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported)
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May
20,
2009
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PACIFIC ETHANOL, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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000-21467
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41-2170618
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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400 Capitol Mall, Suite 2060, Sacramento,
CA
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95814
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
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(916)
403-2123
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(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01
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Entry
into a Material Definitive
Agreement.
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Debtor-In
Possession Credit Agreement dated as of May 19, 2009 by and among Pacific
Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol Columbia,
LLC, Pacific Ethanol Stockton, LLC, Pacific Ethanol Magic Valley, LLC, WestLB
AG, Amarillo National Bank and the Lenders referred to therein
Each of
Pacific Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol
Columbia, LLC, Pacific Ethanol Stockton, LLC and Pacific Ethanol Magic Valley,
LLC (collectively, the “Borrowers”), each indirect wholly-owned subsidiaries of
Pacific Ethanol, Inc. (the “Company”), entered into a Debtor-In Possession
Credit Agreement dated as of May 19, 2009 (the “Credit Agreement”) with WestLB
AG, Amarillo National Bank and the Lenders referred to therein (the “DIP
Lenders”).
The
Credit Agreement provides for a super-priority non-amortizing revolving credit
facility (“DIP Revolving Loans”) not to exceed $20,000,000, of which $7,000,000
(the “DIP Revolving Interim Commitment”) is immediately
available. The Credit Agreement also provides for a 1.50:1.00 dollar
conversion (calculated on the basis of a one and one-half dollar of DIP Roll-Up
Loans for each dollar of DIP Revolving Loans provided by the DIP Lenders) in
respect of certain outstanding term loans (“DIP Roll-Up Loans”) under the
Borrowers’ prior credit facility beneficially owned by each applicable DIP
Lender in an aggregate principal amount not to exceed $30,000,000, of which up
to $10,500,000 shall convert concurrently with the funding of the DIP Revolving
Interim Commitment. At Borrowers’ election, they may draw either
Eurodollar Loans (“Eurodollar Loans”) or Base Rate Loans (“Base Rate Loans”)
under the credit facility.
The
maturity date of the DIP Revolving Loans is the earliest of (a) six (6) months
after the closing date under the Credit Agreement, (b) the acceleration of all
or any portion of the obligations under the Credit Agreement, (c) the first
business day on which the bankruptcy court’s interim order expires by its terms
or is terminated, unless the final order shall have been entered and become
effective prior thereto, (d) the conversion of any of the Chapter 11 cases
applicable to the Borrowers to a case under Chapter 7 of the Bankruptcy Code
unless otherwise consented to in writing by the DIP Lenders, (e) the dismissal
of any of the Chapter 11 cases unless otherwise consented to in writing by the
DIP Lenders, and (f) the effective date of any Borrower’s plan of reorganization
confirmed in the Chapter 11 cases (as applicable, the “Maturity
Date”).
Interest
accrued on each of the DIP Revolving Loans is payable, without duplication, (a)
on the Maturity Date, (b) with respect to Eurodollar Loans, on the last day of
each applicable interest period or, if applicable, any date on which such
Eurodollar Loan is converted to a Base Rate Loan, (c) with respect to Base Rate
Loans, on a specified monthly payment date or, if applicable, any date on which
such Base Rate Loan is converted to a Eurodollar Loan, and (d) with respect to
any DIP Revolving Loan, on any date when such DIP Revolving Loan is prepaid
under the Credit Agreement. Interest accrued on each Roll-Up Loan
shall be payable on the Maturity Date. Interest accrued on any loans or other
monetary obligations after the date such amount is due and payable is payable
upon demand.
Eurodollar
Loans accrue interest at a rate equal to to the rate per annum obtained by
dividing (x) LIBOR for the applicable interest period and such Eurodollar Loan,
by (y) a percentage equal to (i) 100% minus (ii) the Eurodollar Reserve
Percentage for such interest period. Eurodollar Reserve Percentage
means the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any DIP
Lender, under regulations issued from time to time by the F.R.S. Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to eurocurrency
funding. The Eurodollar Loan rate for each outstanding Eurodollar
Loan shall be adjusted automatically as of the effective date of any change in
the Eurodollar Reserve Percentage.
Base Rate
Loans accrue interest at a rate equal to a fluctuating rate per annum equal to
the highest of (i) the Federal Funds Effective Rate plus one-half of one percent
(0.50%), (ii) the rate of interest in effect for such day as publicly announced
from time to time by WestLB as its “prime rate” and (iii) LIBOR plus one percent
(1%). Any change in such rate announced by WestLB shall take effect
at the opening of business on the day specified in the public announcement of
such change.
The
Borrowers are responsible for the fees and expenses of the DIP Lenders, payable
on demand, including all reasonable fees, costs and expenses. The
Credit Agreement also provides for a structuring fee of one percent (1%) of the
total loan commitment. In addition, the Credit Agreement provides for
monthly fees equal to two percent (2%) per annum on the average daily amount by
which the total loan commitment exceeds the outstanding amount of the DIP
Revolving Loans during the immediately preceding month.
The
Borrowers’ obligations under the Credit Agreement are secured by a fully
perfected first priority security interest in and liens upon substantially all
of the Borrowers’ assets. The Credit Agreement contains other
customary representations, warranties, covenants and other
obligations.
The
description of the Credit Agreement does not purport to be complete and is
qualified in its entirety by reference to the Credit Agreement, which is filed
as Exhibit 10.1 to this report and incorporated herein by
reference.
Pledge
and Security Agreement dated as of May 19, 2009 by and among Pacific Ethanol
California, Inc., Pacific Ethanol Holding Co. LLC and WestLB AG
Each of
Pacific Ethanol California, Inc. (“PE California”) and Pacific Ethanol Holding
Co. LLC (“PE Holding”), each a direct or indirect wholly-owned subsidiary of the
Company, entered into a Pledge and Security Agreement dated as of May 19, 2009
(the “Security Agreement”) with WestLB AG. The Security Agreement secures all
obligations owed under the Credit Agreement. The collateral covered by the
Security Agreement includes PE California’s ownership interest in PE
Holding. The Security Agreement contains other customary
representations, warranties, covenants and other obligations.
The
description of the Security Agreement does not purport to be complete and is
qualified in its entirety by reference to the Security Agreement, which is filed
as Exhibit 10.2 to this report and incorporated herein by
reference.
Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
sheet Arrangement of a Registrant.
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The
information set forth in Item 1.01 of this report is incorporated
herein by reference.
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Item
9.01
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Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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10.1
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Debtor-In
Possession Credit Agreement dated as of May 19, 2009 by and among Pacific
Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol
Columbia, LLC, Pacific Ethanol Stockton, LLC, Pacific Ethanol Magic
Valley, LLC, WestLB AG, Amarillo National Bank and the Lenders referred to
therein (*)
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10.2
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Pledge
and Security Agreement dated as of May 19, 2009 by and among Pacific
Ethanol California, Inc., Pacific Ethanol Holding Co. LLC and WestLB AG
(*)
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_______________
* Filed
herewith
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: May
27, 2009
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PACIFIC
ETHANOL, INC.
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By: /S/ CHRISTOPHER
W. WRIGHT
Christopher
W. Wright,
Vice President, General Counsel &
Secretary
EXHIBITS
FILED WITH THIS REPORT
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Number
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Description
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10.1
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Debtor-In
Possession Credit Agreement dated as of May 19, 2009 by and among Pacific
Ethanol Holding Co. LLC, Pacific Ethanol Madera LLC, Pacific Ethanol
Columbia, LLC, Pacific Ethanol Stockton, LLC, Pacific Ethanol Magic
Valley, LLC, WestLB AG, Amarillo National Bank and the Lenders referred to
therein
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10.2
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Pledge
and Security Agreement dated as of May 19, 2009 by and among Pacific
Ethanol California, Inc., Pacific Ethanol Holding Co. LLC and WestLB
AG
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6