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Aventine Energy declares bankruptcy

Another ethanol company has filed for bankruptcy. This one wasn’t totally unexpected, as Aventine Renewable Energy, based in Pekin, Illinois, had indicated last month that itwas considering such a move.

Aventine and six affiliates cite declining liquidity and margins as the reason for asking for Chapter 11 protection from creditors. Company officials say a large investment in auction-rate securities was partially to blame for the decline inliquidity. They also cite fixed obligations to buy corn and natural gas at above-market prices, as well as narrowing spreads between ethanol and corn prices that have caused negative gross margins since mid-2008.

Aventine operates plants in Pekin and Aurora, Nebraska.