OAKHURST, N.J. (DTN) -- Pacific Ethanol Inc. announced on Tuesday, March 3, it has signed a definitive agreement to sell its 74% ownership stake in Pacific Aurora LLC to the Aurora Cooperative Elevator Company for $52.8 million of consideration, subject to certain working capital adjustments. Aurora Cooperative currently holds a 26% ownership interest in Pacific Aurora LLC.
Included in the sale are two ethanol production facilities with a combined annual production capacity of 145 million gallons, a grain elevator with storage capacity of 4.1 million bushels and integrated rail facilities located in Aurora, Nebraska.
After working capital adjustments and the settlement of certain payables between Pacific Aurora LLC and the Aurora Cooperative, the consideration received at closing is expected to be approximately $27 million in cash and $16.5 million in promissory notes. The sale is expected to close in the next 45 days, subject to customary closing conditions.
"The sale of our interest is a win-win for both companies, strengthening Pacific Ethanol's balance sheet while providing Aurora Cooperative with full ownership of these assets," said Neil Koehler, Pacific Ethanol's president and CEO. "We are confident that under Aurora Cooperative's capable management and farmer ownership the facilities will provide value to the local community and the overall ethanol industry. We are committed to a smooth transition of operations and look forward to further collaboration with Aurora Cooperative in growing a successful ethanol business."
Chris Vincent, Aurora Cooperative president and CEO, said, "This investment is a great opportunity for Aurora Cooperative, its owners, and the communities that we support. We understand the significance that these two ethanol plants, grain facilities and rail assets mean to our owners. Achieving full ownership of this local destination market is pivotal to our shared success. We look forward to these assets providing long term value for our owners, our Cooperative and our communities."
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