Green Plains Inc.has announced that it has entered into an asset purchase agreement with Valero Renewable Fuels Co. LLC to sell three of its ethanol plants located in Lakota, Iowa, Bluffton, Indiana, and Riga, Michigan, US for US$300 million in cash, plus approximately US$28 million of working capital also paid in cash.
The transaction involves 280 million gal. of nameplate capacity, or approximately 20% of the company’s reported ethanol production capacity.
Green Plains also entered into an asset purchase agreement with Green Plains Partners LP (GPP) to acquire the storage and transportation assets and the assignment of railcar leases associated with the Lakota, Bluffton and Riga ethanol plants. Green Plains will exchange approximately 8.9 million units it owns of GPP, valued at US$120.9 million, to GPP for the storage and transportation assets and railcar leases.
In addition, Green Plains and GPP agreed to extend the storage and throughput services agreement an additional three years to 30 June 2028.
The quarterly minimum volume commitment associated with the storage and throughput services agreement will be 235.7 million gal., or approximately 80% of the new Green Plains annual production capacity of 1.183 billion gal.
Both transactions are anticipated to close during 4Q18. These purchase agreements are subject to customary closing conditions, regulatory approvals and contain normal and customary representations, warranties, and indemnification obligations.
Ocean Park and XMS Capital Partners acted as financial advisors and Husch Blackwell LLP acted as legal advisors to Green Plains in connection with the transaction.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/16102018/green-plains-to-sell-ethanol-plants-to-valero-renewable-fuels/