Green Plains Enters into Agreement to Sell Three Ethanol Plants to Valero Renewable Fuels
October 10 2018 - 4:45PM
Green Plains Inc. (NASDAQ:GPRE) announced today that it has entered
into an asset purchase agreement with Valero Renewable Fuels
Company LLC to sell three of its ethanol plants located in Lakota,
Iowa, Bluffton, Ind., and Riga, Mich. for $300 million in cash,
plus approximately $28 million of working capital also paid in
cash. The transaction involves 280 million gallons of nameplate
capacity, or approximately 20% of the Company’s reported ethanol
production capacity.
“The sale of these three ethanol plants demonstrates our
commitment to strengthening our balance sheet and unlocking value
for our shareholders,” said Todd Becker, president and chief
executive officer of Green Plains. “As we stated in May, when we
outlined our Portfolio Optimization Program, we would divest assets
that enable us to execute our long-term strategic objectives. This
sale is the first step towards our strategic objectives to prove
the value of our assets and to significantly reduce or eliminate
term debt by the end of 2018. We will continue with our
optimization plan and anticipate communicating additional
transactions in the near future.”
Green Plains Inc. also entered into an asset purchase agreement
with Green Plains Partners LP (“Partnership”) to acquire the
storage and transportation assets and the assignment of railcar
leases associated with the Lakota, Bluffton and Riga ethanol
plants. Green Plains Inc. will exchange approximately 8.9 million
units it owns of the Partnership, valued at $120.9 million, to the
Partnership for the storage and transportation assets and railcar
leases. In addition, Green Plains Inc. and the Partnership agreed
to extend the storage and throughput services agreement an
additional three years to June 30, 2028.
“Exchanging a portion of Green Plains Inc.’s ownership in the
Partnership to acquire the three ethanol facilities’ storage assets
from Green Plains Partners is highly beneficial to both parties.
For Green Plains Inc., it maximizes the cash proceeds from the sale
of the three ethanol facilities and reduces the associated minimum
volume commitment throughput of ethanol production. For Green
Plains Partners, it lowers the distributable cash flow needs,
enabling us to maintain the current annual distribution, making for
an accretive transaction for the Partnership unitholders,” Becker
stated.
The quarterly minimum volume commitment associated with the
storage and throughput services agreement will be 235.7 million
gallons or, approximately 80% of the new Green Plains Inc. annual
production capacity of 1.183 billion gallons.
Both transactions are anticipated to close during the fourth
quarter of 2018. 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.
About Green Plains Inc.Green Plains Inc.
(NASDAQ:GPRE) is a diversified commodity-processing business with
operations related to ethanol production, grain handling and
storage, cattle feeding, food ingredients, and commodity marketing
and logistics services. The company is one of the leading producers
of ethanol in the world and, through its adjacent businesses, is
focused on the production of high-protein feed ingredients and
export growth opportunities. Green Plains owns a 62.4% limited
partner interest and a 2.0% general partner interest in Green
Plains Partners. For more information about Green Plains, visit
www.gpreinc.com.
Forward-Looking StatementsThis news release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended.
Forward-looking statements reflect management’s current views,
which are subject to risks and uncertainties including, but not
limited to, anticipated financial and operating results, plans and
objectives that are not historical in nature. These statements may
be identified by words such as “believe,” “expect,” “may,”
“should,” “will” and similar expressions. Factors that could cause
actual results to differ materially from those expressed or implied
include risks related to Green Plains’ ability to successfully
complete the sale of three ethanol plants to Valero Renewable Fuels
and other risks discussed in Green Plains’ reports filed with the
Securities and Exchange Commission. Investors are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date of this news release. Green Plains assumes no
obligation to update any such forward-looking statements, except as
required by law.
Contact: Jim Stark, Vice President - Investor
and Media Relations, Green Plains Inc. (402) 884-8700
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