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Archer-Daniels-Midland Company Message Board

  • d8473572 d8473572 Mar 18, 2009 3:55 PM Flag

    Here Is The Story On The Ethanol Plants

    http://us.rd.yahoo.com/finance/external/reuters/SIG=1165jh9eu/*http://www.reuters.com/legacyArticle?duid=mtfh15485_2009-03-18_19-13-27_n18363207_newsml&rpc=44&type=marketsNews


    Looks like ADM didn't win, but then again, those that did (other than VLO) will have problems doing anything with them. VLO will produce for its own needs.

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    • Good! I am glad, adm has enough ethanol exposure for now. So vlo and Bp are going to be the next two refiners and oil company into ethanol. I think Bp is actually close to being the first ethanol from cellulose plant. I was happy to hear adm is expanding its core business and bought another cocoa/chocolate company. Why pay too much for ethanola assets.
      Still adm might make more aquistions in the tough economy as its the major stable blue chip company in the ag sector. Should be trading above its Yahoo 1 year target now. jmho.

    • You all should go to the verasun web site and click and the BK site and look at the court doc. Under cort transcrips.You will see that ADM got the shaft in the bidding process.

    • Likely the banks will sell their 9 plants. Valero got nice plants in good corn. GB

      Valero won VeraSun plants over ADM with flexible bid
      Wed Mar 18, 2009
      (Reuters) - Oil refiner Valero Energy beat out Archer Daniels Midland in buying bankrupt VeraSun Energy Corp's ethanol plants because ADM was only interested in buying the entire company, a lawyer for VeraSun said on Wednesday.
      VeraSun announced on Tuesday that Valero, the largest U.S. oil refiner, had won an auction to buy seven of its ethanol plants while three VeraSun creditors would buy the rest of its plants for a total of about $1.05 billion, topping ADM's bid of $700 million.
      U.S. Bankruptcy Court Judge Brendan Shannon told a hearing in Wilmington, Delaware on Wednesday that he would approve the sale, saying VeraSun had held "a thorough and complete auction."
      Valero won the auction with a bid of $477 million, but will pay about $537 million in total to cover working capital and other costs. It expects to close the deal in April.
      "The debtors truly are pleased with where we are today," Pat Nash, lawyer for VeraSun, told the court.
      "While ADM was only willing to acquire the whole company, Valero was willing to acquire ... any number of the plants," Nash said, adding that ADM's bid had totaled $700 million.
      VeraSun, the nation's largest publicly listed ethanol maker, filed for Chapter 11 bankruptcy protection in October last year after it locked in corn prices near their highest levels of the year, squeezing its margins as prices for ethanol weakened.
      Valero had said in February it would pay $280 million for five of the VeraSun plants, but that figure rose during an auction on Monday.
      "We got Valero and ADM into the auction room bidding against each other," Nash said.
      Valero had submitted bids for each of the 16 plants owned by VeraSun, as well as its four planned plants, but ADM's bid was for all the plants together. Valero had also already received antitrust approval for the purchases.
      VeraSun listed debts of $1.91 billion and assets of $3.45 billion when it filed for bankruptcy protection.
      While the Valero offer would give some money to unsecured creditors of VeraSun who hold $450 million in securities, the plants sold to the company's other creditors would not because they had made "credit bids" in which they used their existing claims against VeraSun.
      The creditors that won bids under the auction were Dougherty Funding LLC, which will pay $93 million for one plant, a consortium led by AgStar Financial Services, which will pay $324 million for six plants and a group led by West LB AG, which will pay $99 million for two plants.
      Valero's winning bid includes $350 million for five plants in South Dakota, Iowa and Minnesota and a development site in Indiana that were grouped together under VeraSun Group.
      It will also pay $72 million for an Iowa plant that VeraSun had bought from U.S. Bio Energy last year, and $55 million for a plant in Nebraska.

 
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