SecProbe.io

March 3, 2015

Via E -Mail
Christopher Wright , Esq.
Vice President and General Counsel
Pacific Ethanol, Inc.
400 Capitol Mall, Suite 2060
Sacramento, CA 95814

Re: Pacific Ethanol, Inc.
Registration Statement on Form S -4
Filed February 4, 2015
  File No. 333 -201879

Dear Mr. Wright :

We have reviewed your registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so  we may better
understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information .  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendm ent is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.

General

1. Please provide us with copi es of all materials prepared by the financial advisors and shared
with the boards of directors and their representatives.  This includes copies of the board
books and all transcripts and video presentations.

2. Please note that all exhibits and appendices ar e subject to our review.  Accordingly, please
file or submit all of your exhibits with you r next amendment or as soon as possible.  Please
note that we may have comments on these exhibits once they are filed, as well as the related
disclosure in the filing .  Please understand that we will need adequate time to review these
materials before accelerating effectiveness.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 2

 Prospectus’ Outside Cover Page

3. Please revise your descriptions of the merger to describe the transaction in clear, plain
English. Please sta te simply that Pacific Ethanol will acquire Aventine through a merger.

4. Because this letter to shareholders also serves as soliciting material, strive for a balanced
presentation.  Where you include the boards’ recommendation here and elsewhere, disclose
with equal prominence that board members will directly benefit from the merger.  In
particular we note that Aventine board members have interests in the merger beyond those of
most shareholders.

5. In addition to stating that the stockholders of Pacific Ethanol will continue to own their
existing shares and the rights and privileges of their existing shares will not be affected by
the merger, please disclose that they will experience dilution from th e issuance of shares in
this merger.  Please revise the disclosure on page 2 under the heading “Q: What will
Aventine stockholders receive in the merger for their shares?” as well.

Additional Information

6. In addition to specifying the date by which stock holders must request copies of documents
incorporated by reference into the proxy statement/prospectus, please disclose that to obtain
timely delivery of such information, s tockholders  must request the information no later than
five business days before the  date they must make their investment decision.  See Item 2 of
Form S -4.

Questions and Answers About The Merger, page 1
Q: Why is Pacific Ethanol asking to amend its Certificate of Incorporation to create a class of
non-voting common stock?, page 5
7. Here  and elsewhere in the prospectus as appropriate, p lease disclose the reason for
structuring the merger consideration to include non -voting stock.
Q. Will the merger be taxable to stockholders of Aventine?, page 6

8. We note your disclosure that in order to m aintain the tax free treatment of the merger, Pacific
Ethanol is limited in the amount of non -voting common stock that may be issued.  Please
expand your disclosure to include more information regarding the limit of non -voting
common stock that may be issu ed.
Q: Does Aventine’s board of directors recommend that Aventine stockholders adopt the merger
agreement and the transactions contemplated thereby? , page 8
9. Please disclose the aggregate value of the inter ests that Aventine’s board has in this merger.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 3

 Q: Are there any Pacific Ethanol or Aventine stockholders already committed to vote in favor of
the merger -related proposals?

10. Please disclose the number of stockholders Pacific Ethanol entered voting agreements with.

Summary, page 14

Conditions to Compl etion of the Merger, page 24

11. Please discuss the $10 price condition here and place the likelihood of meeting this condition
in context by discussing Pacific Ethanol’s most recent prices.  We note the first risk factor.
Stockholders Agreements, page 26
12. Please fully explain the drag -along requirement.
Aventine Forward -Looking Financial Information, page 22

13. Please disclose why Aventine did not provide projections for the combined company.

Shares beneficially Owned by Directors and Executive Officers of Pacific Ethanol
and Aventine, page 26

14. Please expand your disclosure to include the vote required for approval of the merger.  See
Item 3(h) of Form S -4.

The issuance of shares of Pacific Ethanol common stock and non -voting common stock to
Aventine stockh olders in the merger will substantially dilute the interest in Pacific Ethanol held
by Pacific Ethanol stockholders prior to the merger, page 33

15. Please quantify t o the extent possible the level dilution expected.

Aventine has significant indebtedness und er a term loan facility…, page 37

16. Please disclose the status of covenant compliance.

Aventine is currently engaged in litigation stemming from contractual obligations to complete
certain capacity expansions in Aurora, Nebraska, page 37
17. Please disclose with specificity the consequences of a negative outcome in this litigation.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 4

 Aventine depends on rail, truck, and barge transportation for delivery of corn to it and the
distribution of ethanol to its customers, page 42

18. Please disclose th e impact the litigation will have on the arrangements discussed here.

Aventine, and some of its major customers, have unionized employees and could be adversely
affected by labor disputes, page 42

19. Please disclose any experience with work stoppages.

The failure to integrate successfully the businesses of Pacific Ethanol and Aventine in the
expected timeframe would adversely affect the combined company’s future results following the
completion of the merger, page 43

20. To the extent estimable, please dis close the costs (or range of costs) expected to be incurred
as a result of the merger.  We note the disclosure on page 45 that the “exact magnitude” is
currently unknown.

Pacific Ethanol’s ability to utilize net operating loss carryforwards and certain o ther tax
attributes may be limited, page 45

21. Please quantify to the extent possible the amount of potential lost benefit discussed here.

Results of Operations, page 55

22. On page 58, you state the $2 million increase in depreciation and amortization expens e
during the nine months ended September 30, 2014, was “primarily related to Aventine’s
Aurora facilities.”  Please revise to expand your explanation to identify the specific plants
and describe the specific events that led to increased depreciation.

The Proposed Merger, page 86

23. We note your disclosure starting on page 88 regarding the discussion of an equity exchange
transaction.  Please tell us whether any alternative transactions were considered?  If so,
please revise your disclosure to discuss the alt ernative transactions that were considered,
including why such alternative transactions were not pursued.

24. We note your disclosure on page 97 that on December 9, 2014 a representative of Akin
Gump conducted a telephone conference call to discuss, among oth er things, the inclusion of
Pacific Ethanol non -voting common stock as a component of the merger consideration.
Please revise your prospectus to include disclosure regarding the discussions involving the
addition of non -voting common stock to the merger c onsideration.  Please make
corresponding revisions to the Summary section.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 5

 Background of the Merger, page 88

25. Please revise the discussion in this section to describe in sufficient detail who initiated
contact among the parties, identify all parties pres ent at the meetings, explain the material
issues discussed, and the positions taken by those involved in each meeting.  We may have
additional comments.

Recommendation of the Pacific Ethanol Board and its Reasons for the Merger, page 103

26. Please review and revise the disclosure throughout this section to clearly provide a
reasonably detailed discussion that clearly elaborates on the conclusions drawn by the board
as to the benefits or detriments of each factor.  Additionally, disclose whether all factors
deemed material were discussed in the prospectus.  The current disclosure is often conclusory
in nature or unclear.  Please do the same for the recommendation section related to
Aventine’s board.

Risks and Potentially Negative Factors , page 104

27. Please explain how the first bullet represents a negative factor.

28. Please tell us why the financial presentation of Craig -Hallum and its opinion dated December
29, 2014 constitutes a risk and/or potentially negative factor.

29. Please tell  us whether you considered  including  Aventine’s $1 61,000,000 in debt as a
negative factor to the merger.

Opinion of Craig -Hallum Capital Group, LLC, page 105

30. Please clarify whether the financial advisor reviewed the combined financial projections.  We
note they discussed them wit h management.

31. Please revise to provide expanded disclosure concerning the methodology and criteria used in
selecting the companies and transactions analyzed, including whether any companies or
transactions meeting the criteria were excluded.

Recommenda tion of the Aventine Board and its Reasons for the Merger, page 114

Risks and Potentially Negative Factors, page 116

32. Please disclose whether the fact that the financial adviser did not assess similar companies or
transactions was a factor in the board’s determination.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 6

 Opinion of Financial Advisor to the Aventine Board, page 117

33. We note the  limitation on  reliance by “any other person,” which presumably includes
shareholders, appearing in the Duff & Phelps  opinion and the d escriptions th ereof app earing
in the prosp ectus.  Please d isclose the basis for Duff & Phelps ’ belief  that sh areholders cannot
rely upon  the opinion including (but not  limited to)  whether Duff & Phelps in tends to ass ert
the substance of the dis claimer  as a defense to sh areholder claims  that m ight be b rought
against it under appl icable state law.  Describe whether the governing state law has addressed
the availability of such a defense to Duff & Phelps in  connection with a ny such shareholder
claim;  if not, a  statement must be added that the issue n ecessarily would have  to be resolved
by a court of compet ent jurisdiction.  Also dis close that the availability or non-availability of
such a defense will have no effect on the rights and respons ibilities of  the bo ard of  directors
under governing state law or the rights and respons ibilities of either Duff & Phelps or  the
board of  directors un der the federal securities laws.

34. We note your disclosure on page 118 that Duff & Phelps reviewed the publicly traded
securities of certain other companies  and analyzed certain transactions that Duff & Phelps
deemed relevant.  Please reconcile such disclosure with your disclosure on page 120 that
Duff & Phelps was neither able to identify any relevant transactions nor able to analyze any
public companies tha t were sufficiently comparable.

Discounted Cash Flow, page 120

35. Please disclose the conclusions of this analysis in clear, plain English.

Unaudited Pro Forma Condensed Consolidated Financial Information, page 153

35. Please tell us what consideration you have given to including an adjustment to your pro
forma balance sheet for direct, incremental transaction costs related to the business
combination that are not yet reflected in the historical financial statements. See  Article 11 -
02(b)(6) of Regulation S -X.

Preliminary Estimated Purchase Price Consideration, page 157

36. We note that your purchase  price  allocation  results in a bargain purchase gain. Please
confirm to us that you have reassessed whether you have correctl y identified all of the assets
acquired and all of the liabilities assumed and that you have properly measured the
consideration transferred. Please address why you believe that it is reasonable that this
transaction would result in a bargain purchase gain . See ASC 805 -30-25-4 for reference.

37. We note your disclosure that “based on your preliminary analysis, no material identifiable
intangible assets have been determined” and that none of the purchase price has been
allocated to any identifiable intangible a ssets. We further note that you disclose that “some of
Aventine’s customer base has purchased ethanol from Aventine for over ten years,” on page
52. Given this, please tell us what consideration was given to identifying customer based
intangibles based on the contractual or separability criteria in ASC 805.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 7

38. We note that Aventine leases certain assets such as rail cars, barges, buildings and equipment
under noncancelable operating leases as disclosed on page F -14. Please tell us what
consideration was give n to identifying whether the terms of those leases are favorable or
unfavorable when establishing your preliminary estimated purchase price allocation. See
ASC 805 -20-25-12.

Disclosure of Pacific Ethanol Capital Stock, page 160

Non-Voting Common Stock, p age 161

39. Please revise your disclosure to state that the non -voting common stock will not be listed on
the NASDAQ.  We note the disclosure on page 129.

Aventine Renewable Energy Holdings Inc. Notes  to the Condensed Consolidated Financial
Statements (Unaudited)
Commitments and Contingencies, page F -15

40. We note the two loss contingencies concerning Aurora Cooperative Elevator Company.  For
each of these contingencies you state on page F -36 that you are “unable to determine the
impact such litigation wi ll have.”  Please explain to us the reasons you cannot estimate the
reasonably possible additional loss or range of loss for each of these contingencies, including
(1) the procedures you undertake on a quarterly basis to attempt to develop a range of
reaso nably possible loss for disclosure and (2) what specific factors are causing the inability
to estimate and when you expect those factors to be alleviated.

Pacific Ethanol Form 10 -K for the period ended December 31, 2013

Item 1. Business

41. Please revise fu ture filings to disclose the amount of revenue earned in each period from the
sale of ethanol and the sale of co -products.  Please revise your discussion of the results of
operations on page 30 to clarify how the changes in quantities produced and related pricing
impacted your results.  Refer to ASC 280 -10-50-40 and Item 303 of Regulation S -K.  Please
provide us with an example of your intended future 10 -K disclosure and revise your Form S -
4 to include this information, as well.

Risk Factors, page 16

42. We note in your risk factors that your business is materially dependent on a small number of
third -party suppliers. In future filings please disclose the amount of revenue generated from
the sales of ethanol as a result of these third party suppliers.   Please  provide us with an
example of the disclosure using actual numbers for the years currently presented.

Christopher Wright
Pacific Ethanol, Inc.
March 3, 2015
Page 8

 Revenue Recognition , page 38

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