Texas, United States [RenewableEnergyWorld.com] Valero Energy Corporation announced that its bid to buy ethanol plants from VeraSun Energy Corporation has been accepted by the bankruptcy court overseeing the assets’ auction. In addition to the five plants and a sixth site under development in Valero’s original bid, the bankruptcy court approved Valero’s purchase of two additional ethanol plants from VeraSun.
Together, the plants have an annual production capacity of 780 million gallons of ethanol. The aggregate purchase price for the plants will be US $477 million, approximately 30 percent of the plants’ replacement cost. The purchase price excludes working capital and inventory currently estimated at approximately $75 million. Credit Suisse advised Valero on the transaction.
The deal for the plants included in the original bid, which are located in Charles City, Fort Dodge and Hartley, Iowa; Aurora, South Dakota; Welcome, Minnesota and the site under development in Reynolds, Indiana, is expected to close on April 1.
The purchase of the additional plants from VeraSun, which are located in Albion, Nebraska and Albert City, Iowa, is expected to close shortly after the first transaction. This second deal is still subject to regulatory approval. Valero said that it plans to operate all of the plants through its subsidiaries.
“These are high-quality, relatively new assets in good locations for buying feedstocks,” said Bill Klesse, Valero’s chairman and CEO. “We expect increases in the Renewable Fuels Standard to continue. We are also pleased to have such quality people join Valero.”
RenewableEnergyWorld.com contributor Jennifer Kho took a detailed look at what this will mean for the U.S. ethanol industry at the end of Febraury. Click here to read that story.