Boston, MA 04/08/2014 (wallstreetpr) – Leading producer and marketer of low carbon renewable fuels, Pacific Ethanol Inc. (NASDAQ:PEIX), recently announced the offering of its 1,750,000 shares of its common stock at a per share price of $16. The company expects to fetch a total of $28 million from the offering with Lazard Capital Markets LLC and Cowen and Company acting as the book-running managers for the offering.
Pacific Ethanol Destined for Growth
The offering is open till April 8, 2014 with net proceeds after deducting underwriting discounts and commissions as well as other expenses expected to trickle in at approximately $26 million. Proceeds from the offering will be used to pay approximately $0.9 million in outstanding principal, accrued and unpaid interest that the company is owed under the senior unsecured notes. The remaining offering from the offering will also be used for other general corporate purpose.
Pacific Ethanol Inc. (NASDAQ:PEIX) looks set to benefit from the decline of prices for corn with ethanol prices expected to spike. The company saw its shares surge from $9 to $13.67 after reporting impressive financial results for its fourth quarter.
Revenue for the quarter was up by 9.3% coming in at $197 million enabling the company, return to profitability since 2011. The company is now focused on reducing its debt as well as increasing its production. Pacific Ethanol expects a stronger 2014 in terms of revenue thanks to lower corn prices, higher per unit revenue from spiking ethanol price and lower interest costs as the company’s debt continues to subside.
Low Corn Prices to Drive Production
Corn which is the main ingredient for the production of Ethanol has been dropping in price since last year, reaching a low in January. Domestic ethanol production capacity continues to grow having surged from lows of 900 million gallons in 1990 to highs of 13.9 billion gallons as of 2011.
Pacific Ethanol Inc. (NASDAQ:PEIX)’s shares performed dismally on Monday trading session, sinking by a high of 5.10% to close the day at a low of $14.15
