October 12 (Renewables Now) - US ethanol producer and commodities company Green Plains Inc (NASDAQ:GPRE) on Wednesday said it has agreed to sell three ethanol plants, accounting for about 20% of its ethanol production capacity, to Valero Renewable Fuels Company LLC.
The buyer will pay USD 300 million (EUR 259m) in cash, plus USD 28 million of working capital also paid in cash, for the plants in Lakota, Iowa; Bluffton, Indiana; and Riga, Michigan. They have a combined nameplate capacity of 280 million gallons (1.06 billion litres).
Green Plains will use the proceeds to pay down term debt.
"This sale is the first step towards our strategic objectives to prove the value of our assets and to significantly reduce or eliminate term debt by the end of 2018," said president and chief executive Todd Becker. The company's head added it expects to announce additional transactions in the near future as it continues with its portfolio optimisation programme, outlined in May.
Green Plains has also agreed to acquire the storage and transportation assets and the assignment of railcar leases associated with the three plants from Green Plains Partners LP in exchange for part of its ownership in the partnership, valued at USD 120.9 million.
The two deals are expected to close during the fourth quarter of 2018.
(USD 1 = EUR 0.862)