New York - Hedge funds Third Point and Greenlight Capital have made a short-term loan of $19.4 million to BioFuel Energy Corp., in which they hold shares, MarketWatch reports.
With a 12.4% interest rate, a 4% fee and and repayments by March 24, 2011, the Securities and Exchange Commission reports that the bridge loan is secured by an equity stake in a BioFuel subsidiary.
The two hedge funds own 69% of BioFuel’s outstanding common shares combined, MaketWatch said. Third Point and Greenlight stand to make a large profit if BioFuel does not produce the payments.
With debts of $212 million, BioFuel has lost $57 million since 2007.