Green Plains completes acquisition of 3 Abengoa facilities

By Erin Voegele | September 26, 2016

On Sept. 26, Green Plains Inc. announced it has completed the acquisition of three ethanol plants from Abengoa Bioenergy and immediately sold the ethanol storage assets associated with those plants to Green Plains Partners LP.

The three facilities, located in Madison, Illinois; Mount Vernon, Indiana; and York Nebraska, have a combined capacity of 236 MMgy. According to Abengoa, all three plants are currently operational.

“In the past 12 months, we have expanded our ethanol production capacity by approximately 50 percent. Adding the Illinois and Indiana locations provide us with a bigger and more diverse geographic footprint,” said Todd Becker, president and CEO at Green Plains. “With nearly 1.5 billion gallons of production capacity, we are moving meaningful volumes across the agricultural and energy supply chains, further positioning us to serve both domestic and international markets efficiently and effectively.”

Green Plains purchased the facilities for approximately $237 million in cash plus certain working capital adjustments from Abengoa Bioenergy. The ethanol storage assets were sold to Green Plains Partners for $90 million.

Green Plains Partners indicated it used its revolving credit facility, which was recently expanded, to fund the purchase. The partnership also said the storage and throughput agreement between Green Plains Partners and Green Plains Trade was amended as part of the transaction, increasing the minimum volume commitment to 293.6 million gallons per quarter.

“We are executing on the growth strategy we laid out in our initial public offering in June of last year,” said Becker, who also serves as president and CEO at Green Plains Partners. “We’ve added approximately 500 million gallons of throughput volume to our platform through organic projects and acquisitions. In addition, we are pursuing projects within the partnership to expand our downstream logistics activities.”

Husch Blackwell LLP acted as legal advisor to Green Plains in connection with the transaction. Carl Marks Advisors acted as financial advisors and DLA Piper acted as legal advisors to Abengoa Bioenergy. The terms of the drop down transaction were approved by the board of directors of the general partner and the board of directors’ conflicts committee, which consists entirely of independent directors. The conflicts committee engaged Evercore to act as its independent financial advisor and Vinson & Elkins to act as its legal counsel.

Spain-based Abengoa announced it was filing for preliminary creditor protection in late 2015. On Jan. 25, the company announced plans to sell its non-core assets, including its first-generation biofuels plants, as part of a new restructuring plan to avoid bankruptcy. In late February, Abengoa Bioenergy U.S. Holdings LLC and five of its U.S. bioenergy subsidiaries filed for voluntary Chapter 11 bankruptcy

Abengoa announced agreements to sell four of its U.S. ethanol plants in June. On Aug. 22, the U.S. Bankruptcy Court for the Eastern District of Missouri named successful bidders for five Abengoa first-generation ethanol plants in the U.S.  Approximately one week later, on Aug. 29, the court approved the plant sales, with closings expected to occur within the following 30 days. 

In addition to the three plants sold to Green Plains, two other facilities were addressed by the court’s sale approval. A subsidiary of KAAPA ethanol is purchasing the 90 MMgy plant in Ravenna, Nebraska, while IMC Inc. is purchasing the facility in Colwich, Kansas.