Green Plains Partners to Sell Ethanol Storage Assets to Green Plains Hereford LLC

Source: www.gulfoilandgas.com 12/15/2020, Location: North America

Green Plains Partners LP has reached an agreement to sell its ethanol storage and transportation assets located at the Green Plains’ Hereford, Texas ethanol facility to Green Plains Hereford LLC for $10 million, along with the transfer of associated railcar leases. As part of the transaction, the minimum volume commitment of Green Plains will be reduced by 3.25 million gallons per quarter.

“This transaction allows Green Plains Partners to accelerate its debt repayment with the proceeds while minimizing changes to the company’s distributable cash flow. The transaction also enables the parent, Green Plains Inc., to sell its ethanol facility and reinvest the proceeds from the sale of the plant toward its protein technology initiative which should result in higher run rates and higher throughput rates,” said Todd Becker, president and chief executive officer of Green Plains Partners. “The Partnership continues to have strong cash flows supported by long term minimum volume commitments.”

The quarterly minimum volume commitment associated with the storage and throughput services agreement will be amended to 232.45 million gallons per quarter or, approximately 91% of the 1.023 billion gallons of annual production capacity of Green Plains Inc. Approximately 230 of the 2,700 railcars managed by Green Plains Partners are anticipated to be conveyed to Green Plains Inc. as part of the transaction.

The transaction is anticipated to close within the next 30 days in conjunction with the completion of the Green Plains Hereford LLC ethanol asset sale. The purchase agreement is subject to customary closing conditions.

The terms of this transaction were approved by both the board of directors of the general partner and the board of directors’ conflicts committee, which consists entirely of independent directors.


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