Date Posted: 12/15/2006 Evening Standard (London) (KRT): Dec. 14 --
Britain's biggest biodiesel producer, Biofuels Corporation, whose state-of-the-art green energy plant was opened by Prime Minister Tony Blair in the summer, admitted today its future may be in doubt. With the cost of soya, palm oil, rapeseed and methanol soaring as fuel selling prices are falling -- making production of biodiesel barely commercial -- the company has admitted it needs a rescue refinancing. With losses of £82 million in the past 18 months, £88 million of debt against a borrowing ceiling of £95 million, and a £38 million deficit in shareholder funds, the company's auditors BDO Stoy Hayward today warned: "The existence of a material uncertainty...may cast doubt on the group's ability to continue as a going concern." The shares, which have collapsed by 80 percent since Blair opened the Teesside 1 plant, fell a further 3p today to a new low of 39 1/2p, compared with a 2004 float price of 75p. Chief executive Sean Sutcliffe said the company had negotiated a six-month extension on its borrowing from Barclays but its financial adviser JPMorgan Cazenove will need to organise a refinancing by March. The Teesside 1 plant has been dogged by technical problems and the production of substandard biodiesel. Now it has cut production after admitting its customers are refusing to sign contracts at which Biofuels can make a decent profit.