Nebraska ethanol plants to boost GPRE capacity 45pc
NTR chief executive Jim Barry: 'a significant milestone for GPRE
Friday May 22 2009
US-based ethanol producer Green Plain Renewable Energy (GPRE), which is 40pc owned by Irish group NTR, has agreed to pay over $123m (€89m) to acquire two fuel producing plants in Nebraska.
The move transforms GPRE into the fourth largest producer of ethanol in the United States just as a number of competitors have sunk into bankruptcy due to difficulties in the market.
GPRE said yesterday the acquisition of the two plants will boost its ethanol production capacity by 45pc from 330 million US gallons (1.24 million litres) to 480 million US gallons (1.8 million litres).
West Link
NTR, which once owned the West Link toll bridge in Dublin and used to control Airtricity before it was sold to Scottish and Southern Energy, acquired its 40pc stake in GPRE last year after it merged its existing biofuels business in the US with Green Plain Renewable.
NTR has increased its involvement in the US by acquiring a majority stake in solar energy firm Stirling Energy for €63m last year and investing nearly €100m in Missouri-headquartered Wind Capital Group.
GPRE chief executive Todd Becker said yesterday the decision to buy the two Nebraska plants is consistent with the company's strategy to selectively acquire assets at attractive valuations.
He added that the acquisitions would lower GPRE's overall production costs and improve its ability to compete within the industry.
The deal is being backed by AGStar Financial Services. GPRE will invest $10m in cash when the deal closes next month to provide working capital for the two plants, while AGStar will stump up a $16m revolving loan.
Acquisitions
Jim Barry, NTR's chief executive, said that the acquisitions represented a "significant milestone" for GPRE.
Last week, GPRE, which is also headquartered in Nebraska, reported revenues of $221.1m and a net loss of $9.3m for the first quarter to the end of March. Described as a "tough" quarter by Mr Becker, he said that GPRE had been negatively impacted by three one-time events, which eliminated profit margins.
On Monday, subsidiaries of Pacific Ethanol, the largest ethanol producer on the west coast of the US, filed for bankruptcy. The subsidiaries operate four ethanol plants in three states.
- John Mulligan
