December 14, 2010 / 2:19 PM / 8 years ago

UPDATE 1-German biodiesel producer EOP declares insolvency

* Fails to reach agreement with banks, insolvency opens,

* Hopes to restart production in January

HAMBURG, Dec 14 (Reuters) - Leading German biodiesel producer EOP Biodiesel AG E2BG.DE said on Tuesday it had declared insolvency.

The company said in a statement it had been unable to reach agreement with its banks about finance.

EOP produces 132,000 tonnes of biodiesel annually at a plant in Pritzwalk in eastern Germany. In October, the company stopped biodiesel production following damage to a gear unit at its oil mill.

Insolvency proceedings had been opened at its district court. Provisional insolvency administrator Horst Piepenburg said in the statement the company had a good chance of continued existence.

The company’s false past strategy had been too much of a burden combined with the impact of the accident, the statement said.

The company had in past years invested heavily in east European expansion.

It was still hoped production could resume when repairs to the oil mill were completed, it added.

The mill produces rapeseed oil which is then processed into biodiesel. Without the rapeseed oil the company said it could not fulfil biodiesel deliveries to customers.

“We have made all arrangements to restart the mill in early January,” said production director Bengt Korupp in the statement. “This should also happen. We want to start production again.”

The company said it had already sold 120,000 tonnes of biodiesel, or 90 percent of this year’s planned output, in the spring of this year. (Reporting by Michael Hogan; editing by James Jukwey)

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