DAYTON, Ohio -- REX Stores Corp. announced today that it has made an equity investment of $11.5 million in Levelland/Hockley County Ethanol LLC. Levelland/Hockley has met all conditions precedent, including obtaining financing for REX to proceed with its investment.

Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., will provide the senior debt financing to Levelland/Hockley.

On July 31, REX reported that it had entered into a contingent agreement to invest an additional $11.5 million to $18.0 million in Levelland/Hockley, which intends to construct an ethanol production facility in Levelland, Texas. The $11.5 million equity investment announced today, along with REX's previously announced $5 million convertible secured promissory note commitment, enables REX to secure a majority ownership interest in Levelland/Hockley.

Levelland/Hockley has signed a design/build agreement with ICM, Inc., an engineering firm focused on ethanol, and intends to commence construction of the Levelland, Texas, facility by Nov. 15, 2006. The plant will have a design capacity of 40 million gallons of ethanol annually.

SOURCE: REX Stores Corporation via Business Wire.