Cardinal Ethanol considers selling its 135 MMgy plant in Indiana

By Erin Voegele | February 21, 2019

On Feb. 19, Cardinal Ethanol announced it is exploring the potential sale of its 135 MMgy corn ethanol in Union City, Indiana. The company, however, said it currently plans to continue operations at the plant whether or not it is sold.

A statement issued by Cardinal Ethanol indicates it recently retained financial advisory firm Ascendant Partners Inc. “to assist in strategic planning for the future by evaluating the opportunities and options available to the company.” As an outcome of that process, Cardinal Ethanol said its board has decided to explore the potential sale of the ethanol plant in order to “obtain a profitable return on capital to the original investors and transition ownership to an operator with the capacity and resources to ensure the plant is best positioned for long-term success. The board believes Cardinal Ethanol offers strong selling attributes that buyers would find advantageous.”

Cardinal Ethanol stressed that the plant “continues to operate well despite the current market challenges due to its above average EBITDA competitiveness.”

“Whether the plant is sold or not, the company expects it will continue to operate and process local corn as it has in the past,” said Cardinal Ethanol in the statement. In the event Cardinal Ethanol is not able to identify a buyer willing to acquire the plant at acceptable values and terms, the company said it plans proceed with a separate strategy, “which may range from continuing to operate the business as an independent operator, scaling the business through mergers or acquisitions and investing in new technology to continue the superior performance of the business.”

Cardinal Ethanol’s production facility began operations in 2008. The company said that the annual production capacity for the plant is expected to increase to 140 MMgy following completion of certain capital projects.