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Subsidiary of Hawkeye Energy Holdings Takes Action to Improve Balance Sheet

    --  Hawkeye Renewables reaches agreement to convert debt into equity via a
        financial restructuring plan
    --  All of Hawkeye Renewables' operations are open and conducting business
        as usual
    --  Corn purchases are continuing under normal terms
    --  Sales of ethanol and distillers grains are continuing under normal terms
    --  Hawkeye Growth and Hawkeye Gold units are not part of filing and are
        unaffected

Hawkeye Energy Holdings, LLC ("Hawkeye Energy"), one of the nation's largest ethanol producers, announced today that the proposed plan of reorganization of one of its subsidiaries, Hawkeye Renewables, LLC ("Renewables"), has been overwhelmingly accepted by its first lien lenders. To implement this "pre-packaged" restructuring plan, which will make the unit financially stronger and much better capitalized by converting debt into equity, Renewables has filed for reorganization under chapter 11 of the U.S. Bankruptcy Code in Delaware.

Renewables, which owns and operates ethanol plants in Iowa Falls and Fairbank, Iowa, is open for business and continuing normal operations. Renewables has filed customary "first day motions" with the court seeking authority to honor obligations to the unit's employees and customers as well as critical trade creditors and suppliers in the ordinary course of business, which if granted will leave such parties unaffected by the restructuring.

Renewables' plants in Iowa Falls and Fairbank are buying corn as usual. Renewables fully expects that all corn suppliers will be paid in full under normal terms for current and future contracts and that both plants will continue to meet all sales commitments to their ethanol and distillers grain customers.

Hawkeye Energy's subsidiaries Hawkeye Growth, which owns and operates ethanol plants in Menlo and Shell Rock, Iowa, and Hawkeye Gold, which is responsible for marketing ethanol and distillers grains, are not part of the reorganization and are unaffected by the filing.

Hawkeye Energy Holdings CEO Bruce Rastetter said: "The U.S. biofuels industry is going through a period of historic change and we are taking the necessary steps to position our business units to succeed in a dynamic and sometimes volatile business environment. The ethanol industry was severely affected in 2008 and 2009 by unprecedented volatility in commodity prices and margins. While the market for ethanol has stabilized and financial performance has improved in recent months, it nevertheless became clear that a restructuring of the Renewables unit's balance sheet would be necessary for the company to compete effectively in the future."

Mr. Rastetter continued, "The steps we are announcing today come after lengthy discussions with Renewables' first lien lenders and are designed to strengthen the unit financially and allow it to continue focusing on becoming one of the lowest-cost, best-positioned ethanol manufacturers in the world. Hawkeye Energy continues to believe in the future of the homegrown biofuels industry, and we especially value its critical contribution to energy independence for the U.S. and economic growth right here in Iowa."

The implementation of the plan, which has been accepted by first lien lenders but not by second lien lenders, is subject to court approval. When its financial restructuring is completed, which is expected to occur on an expedited basis, Renewables will be one of the nation's largest, most economically sound independent ethanol producers, with over 220 million gallons of annual ethanol production and very little debt. Renewables will continue to market its ethanol and distillers grains through Hawkeye Gold and will continue to be managed by the team at Hawkeye Energy.

About Hawkeye Energy Holdings

Hawkeye Energy Holdings and affiliates Hawkeye Renewables and Hawkeye Growth have 450 million gallons of ethanol production capacity located in Iowa. Hawkeye Renewables' Iowa Falls and Fairbank facilities currently operate over 220 million gallons of ethanol production and Hawkeye Growth's Menlo and Shell Rock plants operate over 230 million gallons of production. Hawkeye Gold provides marketing services for ethanol and distillers grains for all of Hawkeye Energy Holdings' plants and several independent third party plants. Hawkeye Energy Holdings is headquartered in Ames, Iowa.

For more information, please visit www.hawkeye-energy.com.

    Media Contacts:
    Michael Freitag / Victoria Weld
    Kekst and Company
    (212) 521-4800

SOURCE Hawkeye Energy Holdings