Valero Energy to acquire three ethanol plants for $272 million
15 Dec 2009
Valero Energy Corporation, said yesterday that its wholly owned subsidiary, Valero Renewable Fuels Company has agreed to buy three ethanol plants for $272 million to boost its ethanol production capacity to 1.1 billion gallons per year.
Valero, a Fortune 500 oil and gas refining and retail company based in San Antonio and the country's second largest oil refiner, will add the three plants to the seven purchased in March and will have a combined capacity of 330 million gallons per year.
Its green fuel business, Valero Renewable Fuels Company yesterday signed an agreement with ASA Ethanol Holdings, to buy two ethanol plants that had been previously owned by VeraSun Energy Corporation.
ASA Ethanol Holdings LLC is owned by a former syndicate of lenders to the facilities, agented by West LB AG, which acquired the plants through the VeraSun bankruptcy auction earlier in February 2009.
The plants, located in Linden, Indiana and Bloomingburg, Ohio, each have an annual production capacity of 110 million gallons. Valero will pay $200 million to buy the plants.
Additionally, Valero has received approval from a bankruptcy court to acquire Renew Energy's 110 million gallon per year ethanol facility located near Jefferson, Wis. for $72 million following a bankruptcy auction. Together, Valero will buy the three plants for roughly 41 per cent of their estimated replacement cost.
