Pacific Ethanol Inc

Pacific Ethanol Inc., a California biofuels darling that boasts political connections and an investment from Bill Gates, is short on cash and suffering from higher corn and plant construction costs, which threaten to derail the once-promising biofuels maker. The Sacramento company on Monday posted record-high sales but a larger-than-expected $14.7-million loss in the fourth quarter, reflecting a financial squeeze that has clouded prospects for ethanol producers nationwide.

Cascade Investment, a firm owned by Microsoft Corp. Chairman Bill Gates, agreed Tuesday to buy an $84-million stake in Pacific Ethanol Inc. to help fund construction of fuel-additive plants on the West Coast. Fresno-based Pacific Ethanol is expected to become the largest Western ethanol producer next year with completion of the first of five plants the company is developing. Ethanol prices surged after U.S.

Pacific Ethanol Inc. said its fourth-quarter loss widened to $34.7 million as corn costs overwhelmed ethanol prices. The loss was 61 cents a share, compared with a loss of $15.8 million, or 39 cents, a year earlier, the Sacramento company said in a regulatory filing. Sales rose 23% to $160.4 million.

Calpine Corp., the U.S. power producer that exited bankruptcy protection in January, reported a profit in the second quarter after a year-earlier loss from reorganization costs. Net income was $197 million, or 41 cents a share, compared with a loss of $500 million, or $1.04, San Jose-based Calpine said Monday. Revenue rose 37% to $2.83 billion. The company also named Jack Fusco chief executive. Calpine said Fusco's appointment was effective Sunday.

Pacific Ethanol Inc., the alternative fuel producer partly owned by Microsoft Corp. co-founder Bill Gates, reported a second-quarter loss of $8.33 million on higher corn costs. The loss was 23 cents a share, compared with net income of $2.16 million, or 3 cents, a year earlier, Sacramento-based Pacific Ethanol said. Sales rose 74% to $198 million. Higher prices for ethanol couldn't match the rise in corn costs during the quarter. Corn futures on the Chicago Board of Trade rose to a record $7.99 a bushel on June 27 amid speculation that Midwest flooding would damage crops.

Cascade Investment, a firm owned by Microsoft Corp. Chairman Bill Gates, is selling its 21% stake in Pacific Ethanol Inc. Cascade will convert its preferred stock to 10.5 million common shares and offer them to the public, according to a Pacific Ethanol filing with the Securities and Exchange Commission. At Friday's closing price, Gates lost $24 million on the investment. He paid $84 million for his stake in 2005.

Pacific Ethanol Inc., which counts Microsoft Corp. Chairman Bill Gates among its shareholders, has halted construction of a distillery in California. The firm was building the 50-million-gallon-a-year plant in the Imperial Valley near Calipatria. "We remain committed to completing our ethanol project in Imperial Valley," Pacific Ethanol Chief Executive Neil Koehler said Monday.

Shares of Pacific Ethanol Inc. staged their biggest rally in 20 months after President Bush said he would promote alternative fuels such as ethanol to help reduce the country's dependence on imported oil. "I'd like, for example, to not only advance that technology of deriving fuel from corn, but also deriving fuel from waste materials," Bush said Sunday in a television interview. "I'm convinced we could do that with a good push, a technological push." Pacific Ethanol shares advanced $2.