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Item 1.01.
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Entry into a Material Definitive Agreement.
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Amendment No. 3 to
Credit Agreement
On March 30,
2018, Pacific Ethanol Pekin, LLC (“PE Pekin”), a wholly-owned subsidiary of Pacific Ethanol, Inc. (the “Company”),
Compeer Financial, PCA (the “Lender”) and CoBank, ACB (“CoBank”) entered into an Amendment No. 3 to Credit
Agreement (the “Amendment”) dated March 30, 2018 amending that certain Credit Agreement dated December 15, 2016 by
and between PE Pekin, 1
st
Farm Credit Services, PCA, as lender, and CoBank, as cash management provider and agent (the
“Credit Agreement”). The Amendment also amends and restates that certain First Amended and Restated Term Note dated
August 7, 2017 by PE Pekin in favor of Lender (the “Term Note”).
Descriptions of the
Credit Agreement and the Term Note are set forth in the Company’s Current Reports on Forms 8-K for December 15, 2016 and
August 7, 2017 filed with the Securities and Exchange Commission on December 20, 2016 and August 11, 2017, respectively, and are
incorporated herein by this reference.
The Amendment reduces
PE Pekin’s working capital requirements and provides that PE Pekin and its subsidiaries shall collectively maintain working
capital in an amount not less than $13.0 million commencing on March 31, 2018 and continuing at all times thereafter through November
30, 2018 and not less than $16.0 million commencing on December 1, 2018 and continuing at all times thereafter. The Amendment also
contains numerous customary representations and warranties and other customary terms and conditions.
The Amendment also
amends and restates the Term Note with the provisions of a Second Amended and Restated Term Note dated March 30, 2018 by PE Pekin
in favor of Lender in the principal amount of $64.0 million (the “Amended Term Note”) as described below under this
Item 1.01.
The description of
the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as
Exhibit 10.1 to this report and is incorporated herein by this reference.
Second Amended and
Restated Term Note
On March 30,
2018, PE Pekin executed the Amended Term Note.
The Amended Term Note
updates the number of PE Pekin’s remaining quarterly payments and principal balance as of the date of the Amendment.
The description of
the Amended Term Note does not purport to be complete and is qualified in its entirety by reference to the Amended Term Note, which
is filed as Exhibit 10.2 to this report and is incorporated herein by this reference.
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Item 1.02.
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Termination of a Material Definitive Agreement.
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On March 30, 2018, the
Company’s subsidiaries Pacific Aurora, LLC, Pacific Ethanol Aurora East, LLC and Pacific Ethanol Aurora West, LLC (individually
and collectively, the “Borrower”) and CoBank terminated that certain Credit Agreement dated December 15, 2016 by and
between Borrower and CoBank (the “Pacific Aurora Credit Agreement”). Borrower agreed to pay CoBank an aggregate of
$33,122.58, constituting all outstanding principal, interest, fees and other obligations, to terminate the Pacific Aurora Credit
Agreement. Under the terms of the Pacific Aurora Credit Agreement, Borrower could borrow up to $30.0 million under the terms of
a revolving term loan facility from CoBank that would mature on February 1, 2022 (the “Pacific Aurora Credit Facility”).
Interest accrued at a rate equal to 4.0% plus the higher of (i) 0.000%, or (ii) the rate reported at 11:00 a.m. London time for
the offering of one-month U.S. dollars deposits by Bloomberg Information Services, payable monthly. Borrower was required to pay
a 0.75% per annum fee on any unused portion of the Pacific Aurora Credit Facility.