Source: AgStar news release



A Delaware bankruptcy court approved the AgStar lending groups' credit bid of $324 million for six of the seven VeraSun Energy plants they financed. The six plants will remain in "idle" mode for an estimated 60 days while buyers are secured for these assets. The remaining plant financed by AgStar's lending group, located in Albert City, Iowa, was bought by Valero Energy Corp. for $72 million.



These six plants are located in five upper-Midwest states and are capable of producing 470 million gallons of ethanol annually. Paul DeBriyn, president and CEO of AgStar Financial Services said, "This purchase will protect the interests of AgStar stockholders and our fellow creditors in the lending group. That's what this credit bid accomplishes. Basically, we've taken the necessary steps to ensure these plants will be sold for fair market value. These facilities, and the people working at them, are highly valued assets."



The purchase is expected to close in April.



The AgStar-lead lending group, comprised of 16 financial institutions, has received ample interest in the plants from potential buyers.



"Even during the auction process, we were fielding inquiries from companies interested in purchasing one or more of these six plants," DeBriyn said. "Ethanol has experienced recent volatility but remains a viable industry. Our goal is to have these plants sold as quickly as possible. This is vital so that corn will again be purchased from local sources, jobs will be brought back to rural America, and the renewable fuels industry as a whole will be reinvigorated."



The Congressionally-approved Renewable Fuels Standard requires 10.5 billion gallons of corn-based ethanol to be blended into the U.S. fuel supply in 2009. An experienced senior leadership team, internal industry, legal and financial advisors will continue to actively manage the sale of these ethanol plants. AgStar will be contracting with an experienced third-party company to oversee plant maintenance and prepare for potential start-up of operations.



AgStar clients and stockholders can be assured AgStar is financially sound and their business relationship will not be negatively affected by this purchase. The company's capital base continues to meet regulatory requirements, overall credit quality remains within acceptable levels, and access to funding for new loans is ample.