By KEVIN WALKER
Michigan Correspondent

SIOUX FALLS, S.D. — Last week a number of companies bought ethanol plants belonging to VeraSun Energy Corporation, a large biofuels firm that declared bankruptcy last October.

One of the main buyers, Valero Renewable Fuels, is a subsidiary of Valero Energy Corporation, an oil refiner based in San Antonio, Texas. Ron Litterer, chairman of the National Corn Growers Assoc., thinks that what is happening is not all bad.

“Hopefully, in this situation at least, it’s positive news,” Litterer said. Litterer is head of a committee of corn growers representing the interests of farmers in the bankruptcy court. “There’s some questions about farmer-owned plants versus an oil company owning a plant. There may be something good about it, though.”

Litterer said that VeraSun never was farmer-owned anyway, so that isn’t as much of a concern in this case. He also said that oil companies have had a pretty lukewarm attitude towards the ethanol industry. He hopes that, with an oil company now owning some ethanol plants, this situation might begin to change.
According to Litterer, Valero is definitely planning to operate the ethanol plants.

“Most of those plants are running now,” he said of the facilities Valero just purchased. He also said that a company buying one or more of these ethanol plants “has 30 days from the date the deal is closed to make a decision about whether to honor the contracts growers had with VeraSun.” The sales are expected to close in April.
He added he doubts they will be honored. The plants Valero purchased include facilities in Albion, Neb.; Aurora, S.D.; Albert City, Charles City, Fort Dodge and Hartley, all in Iowa; and Welcome, Minn. It also bought a development site in Reynolds, Ind.

During the same proceedings, which took place on March 18, the remaining VeraSun facilities were successfully bid on by several secured lenders. This group includes plants in Marion, S.D.; Central City and Ord, Neb.; Dyersville, Iowa; Harkinson, N.D.; Janesville, Minn; Woodbury, Mich; Bloomingburg, Ohio and Linden, Ind.

The Woodbury, Mich. plant is one of six that the AgStar Lending Group bought last week. According to an announcement at AgStar’s website, the plants will remain in “idle” mode for 60 days while a buyer is secured. Although Litterer said he wasn’t sure about the future of these plants, a spokeswoman for AgStar sounded more upbeat.

“The AgStar lead lending group has received ample interest in the plants from potential buyers,” said Heather Leiferman, a spokeswoman for AgStar. She said the company is confident that it can sell the plants and that they will continue to operate as ethanol facilities. She wouldn’t disclose the names of any of the potential buyers.

For more details on VeraSun’s bankruptcy, go online at www.verasun.com

For more on AgStar’s purchase of VeraSun plants, visit www.agstar.com