PEKIN, Ill. -- Aventine Renewable Energy Holdings Inc. and Consolidated Grain and Barge Co. have completed their definitive agreement, including a land lease for an ethanol facility and export of dry distillers grain.

Under the terms of the definitive agreement, CGB will transfer to Aventine the rights to lease 116 acres at the Port of Indiana-Mt. Vernon. The land will be leased from the Ports of Indiana under a long-term lease arrangement that has yet to be negotiated.

Aventine intends to construct and operate a 220 million gallon ethanol facility on the leased site. In exchange for the assignment of the option to lease, CGB will become the exclusive grain originator and Dry Distillers Grain with Solubles ("DDGS") export marketer at the proposed facility, as well as the sole provider for ethanol and DDGS loading at the site.

CGB currently owns and operates 65 grain elevators in the U.S. CGB will use its approximately 10-million-bushel elevator system in the Mt. Vernon area to handle grain for the ethanol plant, and will market the DDGS for export to Europe, Japan, and Asia. The Mt. Vernon port site is located on the lower Ohio River with excellent access to existing roads, rail and dock infrastructure, including river access to the Mississippi, Cumberland, Tennessee and Tombigbee rivers. The combination of inbound and outbound logistics provides a long-term and sustainable competitive advantage for both Aventine and CGB. Rail service will be provided by CSX.

The agreement also provides that Aventine will get the first opportunity at any current or future CGB facilities to locate potential ethanol plants. CGB will, in turn, be granted the first opportunity to bid for exclusive grain origination and DDGS export marketing at all of Aventine's future ethanol plants in the United States.

The agreement provides for certain exceptions for existing facilities and for facilities already under consideration in Pekin, Ill., and Aurora, Neb., for merger and acquisition activities, and does not preclude Aventine from structuring business relationships with other grain originating companies when unique opportunities are presented.

Aventine is a leading producer, marketer and end-to-end distributor of ethanol in the United States. Aventine produces, markets and distributes ethanol to leading energy companies. In addition to ethanol, it is also a producer of corn gluten feed, corn germ and brewers' yeast.

Headquartered in Mandeville, La., a suburb of New Orleans, CGB Enterprises operates more than 70 locations across the U.S. and through its subsidiary CGB Co., is a significant principle in the U.S. grain industry. In addition to owning/operating a significant number of grain facilities, CGB Enterprises operates numerous other related businesses units including, stevedoring, soybean processing, barge shipyard repair and fleeting, transportation services packages involving barges, railroad and trucking, ocean vessel services along the gulf coast, and risk management services for U.S. farmers.

SOURCE: Aventine Renewable Energy Holdings Inc. via PrimeZone