Murphy USA completes sale of Hankinson Renewable Energy for $170 million
Ethanol energy density is less than 70% of diesel.
So, 132 million gallons of ethanol is equivalent to 92M gallons of diesel by energy density
Geismar is 37.5M gallons nameplate for SYNM or 41% Hankinson based on energy content
41% of $170M = $69M
Why is SYNM selling their Geismar plant share PLUS the whole company for $40M?
Knowing that renewable diesel brings a premium in RIN value even when adjusting for energy content!
"In Arkansas, Murphy USA announced it has completed the sale of its wholly owned subsidiary Hankinson Renewable Energy, LLC which owns and operates the Hankinson, North Dakota ethanol plant to Guardian Hankinson, LLC. Guardian Hankinson, LLC acquired the 132 million gallon per year facility in an all-cash transaction through a membership purchase agreement. The purchase price for the transaction was $170 million plus estimated inventory and net working capital at closing of approximately $3 million."
The plant hasn't run for over a year and no one is sure if it even works or can work in the future. That's why the plant and company are worth so little on the open market. This is a pre-bankruptcy package being offered by REGI more or less.
Accept the fact that SYNM has a bad management and could not survive the harsh environment and competition. Thanks REGI for the salvation and it's a good opportunity for SYNM shareholders to hold a more successful leader BIO company REGI instead.