Green Plains Pledges Ethanol Plants as Collateral to BlackRock Amid Debt Crisis

Green Plains Inc., a US biofuels maker, has pledged nine of its 10 ethanol plants as collateral to funds managed by BlackRock in exchange for more time to repay nearly $128 million in debt. The agreement marks the latest effort by Green Plains to stay afloat and pursue a turnaround. The company is now pinning its future on a new carbon-capture pipeline to profit from multi-trillion-dollar tax legislation signed into law by President Donald Trump earlier this year.

Green Plains Inc., a prominent US biofuels maker, has pledged nine of its 10 ethanol plants as collateral to funds managed by BlackRock Inc. in exchange for a debt repayment extension. The move, announced on August 13, 2025, allows the company to extend the payment deadline of its junior mezzanine notes held by BlackRock funds until September 2026 [1].

The Omaha, Nebraska-based company has been struggling with an oversupply of ethanol and pressure from electric vehicles, which have curbed overall fuel consumption. Green Plains has also faced challenges with diversification efforts, such as investing in fish feed and clean sugar, which have not yielded significant returns [1].

The debt extension comes with a 2.5% fee, higher interest payments, and additional stock warrants. The notes' interest rate has been raised to 11.75%, with an additional 0.5 percentage point added each quarter until full repayment. Additionally, Green Plains has agreed to issue 3.25 million stock warrants at a strike price of 1 cent per share to BlackRock funds, giving the asset manager the option to grab an extra 5% stake in the company [1].

Green Plains is pinning its future on a new carbon-capture pipeline that will allow it to profit from multi-trillion-dollar tax legislation signed into law by President Donald Trump earlier this year. The company plans to link a third of its plants to Tallgrass Energy LP's Trailblazer carbon pipeline, scheduled to start in the fourth quarter. This will enable Green Plains to sell a greener version of corn-based ethanol and profit from new rules that include a revision of the Biden-era biofuel credit, called 45Z, which rewards fuel makers with the smallest carbon footprint [1].

In a recent earnings call, Michelle Mapes, acting as interim chief executive officer, stated that obtaining a short-term extension was the best tactic to their strategy. She believes executing carbon capture monetization will provide better options for a longer-term solution. Mapes added that the company remains focused on creating long-term value for shareholders [1].

The company expects its carbon-capture strategy to contribute over $150 million annually to its EBITDA starting in 2026. This is part of a broader strategy to improve the company's financial performance and ensure long-term sustainability [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-13/us-biofuels-maker-pledges-plants-against-debt-held-by-blackrock
[2] https://seekingalpha.com/news/4483320-green-plains-outlines-150m-annual-ebitda-contribution-from-decarbonization-strategy-as-carbon