Source: VeraSun Energy Corp. news release
VeraSun Energy Corp., has filed a Bid Procedures and Sale Motion in the United States Bankruptcy Court for the District of Delaware, seeking authority to sell substantially all of the assets of the company and 24 of its affiliates through a court-approved sale process.
As part of the sales process, the company has signed an agreement with Valero Energy Corp., to sell substantially all of its assets relating to the VeraSun production facilities in Aurora, S.D.; Charles City, Fort Dodge, and Hartley, Iowa; and Welcome, Minn.; and a development site in Reynolds, Ind. The Valero purchase agreement provides for a purchase price of $280 million, plus the value of inventory and certain pre-paid expenses, subject to certain customary adjustments. Having entered into the Valero agreement, the company is now required to hold an auction to determine if other bidders will offer more favorable terms than Valero's bid, referred to as a "stalking horse" bid.
Under the proposed Bid Procedures, VeraSun is seeking to sell all of its production facilities and operations in separate or combined transactions. While the company has received expressions of interest with respect to assets other than those that are the subject of the proposed Valero transaction, VeraSun has not yet negotiated a definitive agreement to sell any other facilities.
"Given current difficult industry conditions and continued constrained credit markets, we believe that commencing a sale process is in the best interest of company stakeholders," said Don Endres, VeraSun's Chief Executive Officer.
Through the sale process, VeraSun is offering for sale substantially all of its assets, which may be generally characterized as four distinct operating groups:
- The "VSE Group" consisting of production facilities subject to the Valero bid.
- The "US BioEnergy Group" consisting of production facilities in Central City and Ord, Nebraska; Albert City and Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota, and Woodbury, Michigan.
- The "ASA Group" consisting of production facilities in Albion, Nebraska, Bloomingburg, Ohio, and Linden, Indiana.
- The "Marion Group" consists of the production facility in Marion, South Dakota.
VerSun sait it believes it has sufficient liquidity to maintain its production facilities and workforce through the anticipated conclusion of the sale process.
"We continue to be optimistic about the long-term viability of the renewable fuels industry," Endres said. "Ethanol is a valuable, clean, high-octane, low-carbon fuel that is reducing America's reliance on foreign oil, creating jobs and stimulating the economy."
Pursuant to the proposed Bid Procedures, interested bidders must submit qualifying bids by March 13. If qualifying bids are received, the company would conduct an auction on March 16, and, following Bankruptcy Court approval at a sale hearing, expect to complete the asset sales by March 31, or early in the second quarter, subject to regulatory and other customary closing conditions. The initial hearing for approval of the proposed Bid Procedures is scheduled for Feb. 19, at 9 a.m. in Wilmington, Del.
Rothschild Inc. is serving as VeraSun's financial adviser on the transaction and will be managing the sale process. Credit Suisse is acting as exclusive financial adviser to Valero Energy.