Sioux Falls, South Dakota – U.S. renewable fuels company VeraSun Energy has filed a motion in bankruptcy court to sell substantially all of its assets and 24 of its affiliates through a court-approved sale process.
As part of the process, VeraSun has signed an agreement with Valero Energy Corporation to sell all of its assets relating to VeraSun production facilities in South Dakota, Iowa, Minnesota and Indiana, for a purchase price of US$280 million, plus the value of inventory and certain pre-paid expenses. Under the motion, VeraSun is now required to hold an auction to determine if other bidders will offer a more favourable term than Valero’s bid.
VeraSun said it has received “expressions of interest” with respect to assets outside the proposed Valero transaction, but 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 CEO. “We continue to be optimistic about the long-term viability of the renewable fuels industry. 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.”
VeraSun said it believes it has sufficient liquidity to maintain its production facilities and workforce to the anticipated conclusion of the sale process. The company and 24 of its subsidiaries filed petitions for relief under chapter 11 of the U.S. Bankruptcy Code on October 31, 2008.