Sacramento, Calif.-based Pacific Ethanol (Nasdaq: PEIX), which recently reported "extremely limited liquidity," pulled in $40 million in a stock sale to Lyles United.

Lyles is an affiliate of Fresno, Calif., contractor W.M. Lyles, which designed and built Pacific Ethanol's first plant in Madera, and is currently building the company's Stockton facility.

"The investment shows confidence in our strategy, immediately strengthens our balance sheet, and keeps us on track to achieve our annual operating capacity goal of 220 million gallons in 2008," said Neil Koehler, president and CEO of Pacific Ethanol.

The company's shares took a hit last week when its filed a report with the U.S. Securities and Exchange Commission anticipating a $14 million loss for fiscal 2007.

Pacific Ethanol's shares were at $4.31, down 3.79 percent in early trading today. The company's shares have fallen from a 52 week high of $17.52, achieved almost a year ago.

The ethanol industry has been struggling to boost ethanol prices high enough to offset a rise in the cost of corn, the primary feedstock for the biofuel.

Earlier this week, Basehor, Kan.-based Ethanex Energy (OTC: EHTE) announced that would file for bankruptcy protection (see Ethanex Energy to file for bankruptcy).

The development-stage company failed to secure interim financing of at least $1.5 million for its proposed acquisition of a Nebraska ethanol plant.

Biodiesel is also hitting some bumps in the road, including a rise in the price of soy, with Ralston, Iowa-based biodiesel producer Renewable Energy Group withdrawing plans for a $150 million initial public offering last week (see Renewable Energy Group cancels IPO).

In January, Seattle's Imperium Renewables, another biodiesel maker, canceled plans for a $345 million IPO (see Imperium Renewables puts IPO on hold).

Pacific Ethanol, which has plants in Madera and in Boardman, Ore., is continuing to put up a facility in Burley, Idaho, in addition to the plant under construction in Stockton.