Green Plains sheds three plants, shutters another and offloads storage and rail assets

In Nebraska, Green Plains Inc. announced that it completed the previously announced sale of its three ethanol plants to Valero Renewable Fuels Company LLC for $319 million in cash, including net working capital and other adjustments. The transaction includes ethanol plants located in Bluffton, Ind., Lakota, Iowa, and Riga, Mich. which represented approximately 20% of the company’s reported ethanol production capacity.

In conjunction with this transaction, Green Plains Partners announced that it has completed the sale of the storage assets and assignment of the rail transportation assets associated with the three ethanol plants to Green Plains Inc. The consideration for the transaction consisted of 8.7 million Green Plains units and a portion of the general partner interest equating to 0.2 million hypothetical limited partner units to maintain the general partner’s 2% interest. Green Plains Partners will receive as additional consideration, approximately $2.6 million in cash related to the present value gain on railcars transferred, subject to certain post-closing adjustments.

Green Plains Inc. also announced that it is permanently closing its Hopewell, Va. ethanol facility. A significant portion of the 60 million gallon a year capacity plant will be dismantled during the decommissioning process, with most of the equipment being transferred to other Green Plains facilities. The company is also currently determining the best uses for any remaining equipment and the land.

The closure results in a workforce reduction of approximately 31 employees who will be provided severance and healthcare support. A handful of staff will remain to oversee the decommissioning of the plant, which is expected to take 12 to 18 months.