US-based ethanol producer Biofuel Energy is outlining strategic options, including a potential sale of one or both of its plants after it received default notice from its lenders.

It has appointed Piper Jaffray & Co to act as its financial adviser.

The company has received the notice from First National Bank of Omaha, as Administrative Agent for the lenders under their senior debt facility.

The defaulted payments that were due on 28 September totaled $8.2m through December 2012.

The company, however, has received grace period until 30 July 2013, allowing the company to pursue its strategic alternatives.

The two plants that might shut operations are Fairmont plant in Minnesota and Wood River facility in Nebraska.

Meanwhile, the company has halted production at its Fairmont plant, citing high corn prices and dropping ethanol prices.

It had earlier stated that it will downsize staff at the site by 40.