Advanced BioEnergy Announces Review of Strategic Alternatives
In Minnesota, Advanced BioEnergy announced that it has begun exploring strategic alternatives for its business operations, including the possibility of a sale of one or both of it ethanol plants. The company owns and operates two ethanol production facilities located in eastern South Dakota in Aberdeen and Huron, SD with a combined production capacity of 86 million gallons per year. After making continued capital improvements and operational changes to capitalize on the strategic advantages of ABE’s Aberdeen and Huron locations, ABE’s Board of Directors has determined it is in the best interest of ABE’s unitholders to explore strategic alternatives.
Advanced BioEnergy has retained Ascendant Partners, Inc., an experienced financial advisory firm, to advise it this process and help evaluate the opportunities and options available to ABE. As part of this process, the Board will explore the potential sale of one or both facilities to generate the best value for unitholders and possibly transition ownership to an operator with the capacity and resources to ensure both plants are best positioned for continued long term success.
Since 2011, ABE has made capital investments of $33.8 million, or $0.40 per gallon, in its South Dakota plants to lower costs, improve operations, and expand production capacity. The most notable capital improvements have been adding corn oil extraction to both plants and beginning construction on a grain storage and receiving facility in Aberdeen that will allow the plant to further leverage the low corn basis in the region by developing the site that was originally designed to accommodate doubling Aberdeen’s nameplate capacity from its initial 40MMGY. As the ethanol industry continues to consolidate and transitions to the next generation of technology improvements, the ABE Board of Directors believes the time is right to formally evaluate strategic alternatives and to position the ABE plants to provide continued value to their local communities.
It’s the second such announcement in a one-week stretch. Cardinal Ethanol made a similar announce, as we reported here late last month.
Category: Fuels
