Green Plains Renewable Energy has signed definitive purchase agreements to acquire two ethanol plants located in Nebraska. Addition of these plants will increase the Company’s ethanol production capacity by 45%, from 330 million to 480 million gallons per year. Green Plains is acquiring all of the membership interests in two limited liability companies that own the ethanol plants located near Central City and Ord from a lender group led by AgStar Financial Services for $123.5 million. The Central City plant adds 100 million gallons and the Ord plant adds 50 million gallons of annual expected production capacity.

The Lenders have agreed to provide debt financing to fund the purchases. Green Plains will invest $10.0 million in cash at closing to provide working capital for the plants. The Lenders, upon closing, will also provide a $16.0 million seasonal revolving loan for working capital needs of these two facilities.

“The acquisition of the plants in Central City and Ord lowers our cost of production and improves our ability to compete in the industry,” said Todd Becker, Green Plains’ President and Chief Executive Officer. “This purchase is consistent with our strategy to selectively acquire assets at reasonable valuations that provide long-term benefits to our shareholders.”

“These plants are in excellent locations. Within the 14 contiguous counties surrounding Ord and Central City, there are over 300,000 cattle on feed and approximately 300 million bushels of corn grown annually. This close proximity to large feedlot operations and vast corn supplies will reduce our energy and feedstock costs at these facilities. The Central City and Ord plants share the same process technology deployed at the majority of our plants, which should allow us to integrate them into our business with little disruption,” added Becker.

AgStar Financial Services’ lending group recently acquired these plants through VeraSun Energy’s bankruptcy auction. “We’re pleased to sell these plants to Green Plains Renewable Energy,” said Paul DeBriyn, President and Chief Executive Officer of AgStar Financial Services. “Green Plains is committed to this industry and it’s great to know these facilities will soon be producing ethanol. This company has demonstrated its expertise in successfully operating ethanol plants, and we are excited to expand our relationship with them.”

“Much of the success of these plants is dependent on building solid relationships in Central City, Ord and the surrounding areas. We look forward to working with leaders in each community and the employees at these facilities,” stated Becker.

Tags: Green Plains Renewable Energy