Wisconsin Ag Connection - Renew Energy's Ethanol Plant Sold to Valero

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Renew Energy's Ethanol Plant Sold to Valero
Wisconsin Ag Connection - 12/15/2009

The Jefferson-based Renew Energy LLC has finally found a buyer for its bankrupt ethanol plant. On Monday, Valero Energy Corp., based in San Antonio, Texas, announced it is purchasing three ethanol manufacturing facilities around the country, including Renew. The sale was announced after Valero bid $72 million for the operation in a bankruptcy court auction last week.

Company officials say the new owners are planning to retain all 70 employees at the plant after the sale is completed. That's expected to happen in early 2010. Valero was one of four bidders that submitted offers for the plant.

Last month, Renew submitted plant-closing paperwork with the Wisconsin Department of Workforce Development, stating that its workers could be let go by a possible closing if the company wasn't sold before the end of the year. The company filed for Chapter 11 under the United States Bankruptcy Code in February.

In January, Wisconsin Ag Connection reported that the ethanol plant owed its creditors over $100 million and was directly tied to the financial failures of Olsen's Mill--which has since been forced into receivership. The grain handling company borrowed millions of dollars to help finance the construction and operation of the ethanol plant and wasn't able to pay back its creditors because of the slowdown in the ethanol industry. Olsen's also handled all the corn purchasing agreements for Renew Energy.

Meanwhile, Valero is also purchasing ethanol plants in Linden, Indiana, and Bloomingburg, Ohio--both of which are idle. Reports say that the three plants are being purchased for around 40-percent of their estimated replacement cost.

Valero Energy is currently the largest refining and fuel marketing firm in the United States, and is expected to become one of the nation's leading producers of biofuel made from corn as a result of the newly purchased factories.

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