Abengoa Lines Up Buyers for U.S. Ethanol Plants

Source: By Jacqueline Palank, Wall Street Journal • Posted: Tuesday, June 14, 2016

Abengoa Bioenergy’s ethanol refinery in Madison, Ill.

Abengoa Bioenergy’s ethanol refinery in Madison, Ill. Photo: Kevin G. Hall/TNS/ZUMA Press

Spanish renewable energy firm Abengoa SA has lined up $350 million worth of bids for four of its Midwestern U.S. ethanol plants, which it’s seeking to unload in connection with its global restructuring.

Abengoa’s U.S. affiliates on Sunday filed papers asking the U.S. Bankruptcy Court in St. Louis for permission to put the ethanol plants—in Mount Vernon, Ind.; Madison, Ill.; Ravenna, Neb.; and York, Neb.—on the auction block as soon as August.

Abengoa SA, of Seville, Spain, designs, builds and operates clean energy projects. Proceedings are under way in Spanish and U.S. courts to restructure a multibillion-dollar debt load and shed noncore assets, including the Midwest ethanol plants.

Green Plains Inc. of Omaha, Neb., has offered $200 million in cash for the Mount Vernon and Madison plants, court papers show.

An affiliate of KAAPA Ethanol LLC of Minden, Neb., bid $115 million in cash for the Ravenna plant, and BioUrja Trading LLC of Houston has offered $35 million in cash for the York plant. These two plants were closed late last year due to lack of funding, but their owners’ bankruptcy filing allowed them to obtain financing to restart operations.

All of the cash purchase prices are subject to adjustments, and the bids also include various liabilities.

The bids would be subject to a bankruptcy-court overseen auction process. Court papers show the Abenoga units have proposed an Aug. 18 bid deadline, an Aug. 22 auction and an Aug. 25 hearing for the court to review the winning bids.

“Rapid transition to new ownership will maximize the value of the purchased assets,” lawyers for the ethanol plants said in court papers.

Some of the Abengoa units that own the Midwest ethanol plants sought chapter 11 protection in February, and the entities that own the Mount Vernon and Madison plants joined them in bankruptcy on Sunday in conjunction with their proposed sales.

U.S. executives at the Midwest ethanol plants could share some $2 million in bonuses tied to the plants’ successful sales. The bonus plan is subject to court review at a hearing Wednesday, when the court may also consider whether to allow the plants to go on the auction block.