Minnesota company merging with S.D. ethanol plantsadmin
Two ethanol plants in South Dakota are merging with a Minnesota company.
The deal involves Advanced BioEnergy LLC of Minneapolis and Dakota Fuels Inc., the managing partner of the Heartland Grain Fuels plants in Aberdeen and Huron.
Under the agreement, Advanced BioEnergy will own 100 percent of the Heartland partnership. Heartland owners will invest in Advanced BioEnergy and will receive about $16.8 million in cash and about 2.6 million of newly issued shares in Advanced BioEnergy. Each unit is worth about $20, said Bill Paulsen, general manager of the Aberdeen plant.
Heartland owners will own slightly more ethanol production than before the merger, Paulsen said.
Heartland is owned by: Heartland Producers LLC, Aventine Renewable Energy, South Dakota Wheat Growers and Dakota Fuels.
The boards of Heartland Producers, Aventine, Wheat Growers and Advanced BioEnergy have approved the merger.
Heartland Producers’ members will vote on the transaction after it’s approved by governmental regulators. The vote is planned for the first quarter of 2007.
The Aberdeen plant produces nine million gallons of ethanol a year and the Huron operation puts out 30 million gallons annually.
Heartland is expanding at Aberdeen so it will produce an additional 40 million gallons per year. The merger will not affect the expansion, Paulsen said.
Advanced BioEnergy was organized in 2005. It’s building a 100 million gallon ethanol plant near Fairmont, Neb., and plans similar operations at Rochester, Ind., and Northfield, Minn.