ADM: Bid On Some VeraSun Ethanol Assets; Didn't Acquire Any
17 Marzo 2009 - 4:49PM
Noticias Dow Jones
Agribusiness giant Archer Daniels Midland Co. (ADM) said late
Tuesday that it bid on some of VeraSun Energy Corp.'s (VSUNQ)
ethanol plants for sale in a bankruptcy auction, but didn't buy any
of the facilities.
"We participated in the process, but did not acquire any
assets," said Roman Blahoski, a spokesman for Decatur, Ill.-based
ADM. He declined to say on which of VeraSun's 17 ethanol plants it
bid, or how much it offered for the assets.
A spokesman for Sioux Falls, S.D.-based VeraSun declined to
disclose the results of the auction.
The auction, which began Monday, continued Tuesday because some
of the assets drew multiple bidders, said people familiar with the
negotiations. A hearing to report upon the auction is scheduled in
bankruptcy court for Wednesday.
Valero Energy Corp. (VLO), an independent refiner, had placed a
public bid for five of the assets. The company didn't immediately
respond to requests for comment.
VeraSun filed for Chapter 11 bankruptcy protection in October,
after taking on debt to buy rivals. As corn prices skyrocketed in
mid-2008, a poorly executed risk management strategy led VeraSun's
costs to mount, rendering the company unable to pay its debt. The
company was unable to get enough cash while under bankruptcy
protection to keep all its plants in production or to preserve hope
of restructuring and emerging from bankruptcy in one piece.
The assets for sale have drawn interest largely due to their low
price. A floor bid on the assets from Valero, the largest U.S. oil
refiner, offered about 50 cents per gallon of ethanol production
capacity, only a quarter of the original construction cost of the
plants.
Valero is among the largest ethanol buyers in the U.S. The
company bid $280 million for five of VeraSun's plants and the
rights to build a sixth plant.
Demand for corn-based ethanol, which is commonly added to
gasoline, soared in 2005 due to a federal mandate. High corn prices
in 2008, coupled with weak gasoline demand, resulted in slim
margins for producers, forcing companies such as VeraSun to file
for bankruptcy protection.
-By Jessica Resnick-Ault, Dow Jones Newswires; 201-938-4435;
jessica.resnick-ault@dowjones.com