Show Me Ethanol of Carrollton has passed its latest test for survival with a cash rally from investors.
According to a filing with the United States Securities and Exchange Commission last Tuesday, a voluntary capital was approved by investors with 86 percent of investors giving the nod to the affirmative. A required capital call failed, only getting 69 percent of the votes. Each vote required at least 81 percent approval.
The company initiated the capital call last month in hopes of raising enough funds to satisfy agreements made with loan holders. The company’s equity to capital ratio had fallen to 27 percent. Loan requirements require a ratio of 35 percent.
In an SEC filing last year, the company said it had fallen on hard financial times in 2008 due to the volatile corn markets of last summer and an accident at the plant that had production shut down for days. In addition, former State Treasury Secretary Sarah Steelman pulled $48 million of low interest state backed loans in what many around the company called a political stunt.
Steelman lost a bid for governor in the August primaries and has been replaced by former state senator Clint Zweiful.
The company’s board of managers replaced the plant’s General Manager Greg Thomas with Dennis Alt in November. Alt did not return phone messages left by The Daily News but said in a letter to investors dated Jan. 23, that, “We believe such vigorous support speaks volumes about the strength of our members’ faith in the company.”
Alt went on to urge those who did not support the move to reconsider. He also said that an investment would not be required, but would lower their ownership percentage if they choose not to participate.
The company last week also entered an agreement to open an escrow account to handle the funds with State Bank of Slater for a fee of $10,000.
The filing also states the company is executing amendments to purchase contracts with Ray-Carroll Grain Growers which is the exclusive supplier of grain to the plant for operations. Ray-Carroll is also the exclusive marketer of the plant’s animal feed by-product.
Ray-Carroll Grain Growers General Manger Mike Nordwald was not available for comment.