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Valero Energy Has Winning Bid To Purchase VeraSun Plants
San Antonio TX (SPX) Mar 25, 2009 Valero Energy has announced that its bid to buy ethanol plants from VeraSun Energy 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. The aggregate purchase price of $477 million represented 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. As North America's largest petroleum refining and marketing company, Valero is a leading buyer of ethanol for blending in its gasoline, and its purchase of the plants will give Valero a dedicated supply of ethanol. The purchase of the plants in the original bid - in Charles City, Fort Dodge and Hartley, Iowa; Aurora, S.D.; Welcome, Minn.; and the site under development in Reynolds, Ind. - is expected to close on April 1. The purchase of the additional plants - in Albion, Neb. and Albert City, Iowa - is expected to close shortly afterward, subject to regulatory approval. Valero plans to operate all of the plants through its subsidiaries. "These are high-quality, relatively new assets in good locations for buying feedstocks," said Valero Chairman and Chief Executive Officer Bill Klesse. "We expect increases in the Renewable Fuels Standard to continue. We are also pleased to have such quality people join Valero." This is Valero's initial entry into ethanol production, but it has made investments in other alternative energy companies in recent months. Valero has also completed the first phase of a wind farm near its McKee Refinery in the Texas Panhandle that when complete will generate 50 megawatts of electricity. In 2008, Valero established an Alternative Energy and Project Development Group to explore opportunities in alternative and renewable energy sources. Share This Article With Planet Earth
Related Links Valero Energy Bio Fuel Technology and Application News
Analysis: Lula sticks up for ethanol
Miami (UPI) Mar 18, 2009 Brazilian President Luiz Inacio Lula da Silva is turning to the American business community for help in convincing the United States to lift the import tariff on his country's ethanol, a world-leading alternative fuel. |
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