Valero to bid for Fort Dodge VeraSun
VeraSun Energy Corp. asked a bankruptcy court Friday for permission to sell most of its assets by March 31, including the Fort Dodge production plant.
The Valero Energy Corp., North America’s largest refining company, proposed a $280 million purchase agreement that would allow the sale of five VeraSun production plants including those located in Fort Dodge, Charles City and Hartley.
The deal comes as a separate agreement from the one through which VeraSun placed five of its plants – including the now defunct Albert City and Dyersville facilities – on the auction block.
“Given current difficult industry conditions and continued constrained credit markets, we believe that commencing a sale process is in the best interest of our stockholders,” said Don Endres, VeraSun’s chief executive officer.
VeraSun will hold an auction for other bidders to offer more favorable terms than Valero’s bid. Bidders have until March 13 to submit qualifying bids. If bids are received, the company will conduct an auction on March 16.
VeraSun said it has enough liquidity to maintain production facilities and staff through the sale process.
If the proposal moves forward, Valero would purchase the plants, and operate them under the Valero name, said Bill Day, director of media relations for Valero Energy Corp.
Day said he does not expect the sale of the plants to result in any layoffs.
“If everything goes through, which may be as early as March, we intend to operate each plant with its existing work force,” Day said.
The San Antonio, Texas-based Valero operates petroleum refinery facilities on the Gulf, East Coast and West Coast, and is a large purchaser of ethanol. They currently do not own any ethanol production plants.
“Purchasing these ethanol plants and developing an ethanol business would complement Valero’s portfolio and provide long-term growth opportunities for our shareholders,” Day said.
The company tried to raise $20 million in a public offering in mid-September, but later scrapped that plan to allow Morgan Stanley to help it evaluate “strategic alternatives” involving anything from a buyout to a partial sale of assets. VeraSun and 24 of its subsidiaries filed for chapter 11 bankruptcy on Oct. 31, 2008.
Contact Emilie Nelson at 573-2141 or email@example.com
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