Cattle Manure Used To Fuel Plant

Dallas - Panda Ethanol Inc. announced that its Hereford subsidiary has successfully completed the debt financing on its 100 million gallon ethanol plant in Hereford, Texas. The company will immediately begin facility construction on the 380-acre site and anticipates ethanol production to commence in the second half of 2007.

The first-of-its-kind facility will generate the steam used to manufacture ethanol by gasifying more than 1 billion pounds of cattle manure a year making it one of the most fuel efficient ethanol refineries in the nation. Once completed, it will be the largest biomass-fueled ethanol plant in the United States.

"We are very proud of this project," said Todd Carter, chief executive officer at Panda Ethanol. "It is an important first step for Panda Ethanol and a step in the right direction toward making our country less dependent on foreign oil."

Societe Generale Corporate & Investment Banking arranged the senior debt financing consisting of a $158.1 million senior secured credit facility which includes a $5 million working capital facility and a letter of credit supporting $50 million in tax-exempt bonds that were issued by the Red River Authority of Texas. Additionally, the project has arranged a $30 million subordinated debt credit facility.

Panda Ethanol previously announced that it had closed a private equity placement of approximately $90 million. The company also announced that it has entered into a merger agreement with Cirracor, a publicly-held corporation which trades over the counter. The merger is expected to become effective this fall, subject to the satisfaction of certain requirements, and the combined entity will operate under the name of Panda Ethanol Inc.

SOURCE: Panda Ethanol