2014

VeraSun Energy to Acquire 330 Million Gallons of Ethanol Production Capacity Acquisition to Boost Company's Production Capacity to One Billion Gallons

by End of Next Year



    BROOKINGS, S.D., July 23 /PRNewswire-FirstCall/ -- VeraSun Energy
 Corporation (NYSE:   VSE), one of the nation's largest ethanol producers,
 today announced plans to acquire three ethanol plants with a combined
 annual production capacity of 330 million gallons per year (MMGY) from
 ASAlliances Biofuels, LLC for $725 million.
     The three facilities are each expected to operate at 110MMGY and are
 located in Albion, Nebraska, Bloomingburg, Ohio, and Linden, Indiana. The
 acquisition should become final in 30 to 45 days and is subject to
 customary closing conditions.
     The facilities will provide VeraSun with immediate production capacity
 and revenue. The Linden facility will begin startup operations this month,
 followed by Albion in the fourth quarter and Bloomingburg by the end of
 first quarter 2008. The acquisition will increase VeraSun's production
 capacity to approximately one billion gallons by the end of 2008.
     "This is a unique opportunity to acquire immediate production and
 revenue at a cost similar to that of building new facilities," said Don
 Endres, VeraSun Chairman and CEO. "The capacity gained through this
 acquisition underscores a commitment to our long-term growth strategy while
 maintaining our focus on being an efficient, low-cost ethanol producer."
     "We are pleased that the transaction allows us to continue our
 investment in ethanol through VeraSun," said Tom Manuel, ASAlliances
 Biofuels President and CEO. "VeraSun brings experience and expertise to the
 operation of large, efficient biorefineries and we believe they are the
 premier platform company in the renewable fuels industry."
     VeraSun currently has 340MMGY of production capacity through its
 operating facilities in Aurora, South Dakota and Fort Dodge and Charles
 City, Iowa. VeraSun has another 330MMGY of production presently under
 construction and development in Hartley, Iowa, Welcome, Minnesota, and
 Reynolds, Indiana. The facilities being acquired are sister facilities to
 VeraSun's current fleet as they are all designed by ICM and built by Fagen,
 Inc.
     The company is funding the acquisition through $200 million of equity,
 $250 million of cash and $275 million in project financing. The acquisition
 is expected to be accretive to earnings and free cash flow within the first
 12 months without accounting for potential synergies.
     "Reaching one billion gallons of annual production will be a benchmark
 for VeraSun and represents a maturing of the renewable fuels industry,"
 said Endres. "We believe scale and efficiency are important as we continue
 to focus on reducing production and distribution costs and increasing value
 for our shareholders, customers and plant communities."
     Current ASAlliances plant employees will become VeraSun employees at
 the conclusion of the sale.
     Morgan Stanley & Co. Incorporated is serving as the financial adviser,
 and Cravath, Swaine & Moore LLP is acting as legal counsel for VeraSun on
 this transaction.
     VeraSun will hold a conference call at 10 a.m. EDT/9 a.m. CDT on
 Monday, July 23. Media can participate by calling 1-800-259-0251 and
 entering access code 90286460. International callers must enter the same
 access code after dialing 617-614-3671 to access the call.
     VeraSun Energy Corporation - Plant Profile
     Operating Facilities
     VeraSun Aurora (SD) - 120MMGY (2003 Startup)
     VeraSun Fort Dodge (IA) - 110MMGY (2005 Startup)
     VeraSun Charles City (IA) - 110MMGY (2007 Startup)
     Current Operating Capacity - 340MMGY
 
     Facilities Under Construction or Development
     VeraSun Hartley (IA) - 110MMGY (Q1 2008 Startup)
     VeraSun Welcome (MN) - 110MMGY (Q1 2008 Startup)
     VeraSun Reynolds (IN) - 110MMGY (Q4 2008 Startup)
     Capacity Under Construction and Development - 330MMGY
 
     Facilities From Acquisition
     Linden (IN) - 110MMGY (Q3 2007 Startup)
     Albion (NE) - 110MMGY (Q4 2007 Startup)
     Bloomingburg (OH) - 110MMGY (Q1 2008 Startup)
     Capacity Under Acquisition - 330MMGY
 
     Totals
     5 Plants, 560MMGY by end of 2007
     8 Plants, 890MMGY by end of Q1 2008
     9 Plants, One Billion Gallons of Annual Production Capacity by end of 2008
     About VeraSun Energy Corporation
     VeraSun Energy Corporation (NYSE:   VSE), headquartered in Brookings,
 South Dakota, is a leading producer of renewable fuel. The Company has
 three operating ethanol production facilities located in Aurora, SD, Fort
 Dodge, IA, and Charles City, IA. Two facilities are currently under
 construction in Hartley, IA, and Welcome, MN, and an additional plant is
 under development in Reynolds, IN. VeraSun is in the process of acquiring
 another three biorefineries currently under construction in Albion, NE,
 Bloomingburg, OH and Linden, IN. Upon completion of the new facilities and
 those being acquired, VeraSun will have an annual production capacity of
 approximately one billion gallons by the end of 2008. The Company also has
 plans to extract oil from dried distillers grains, a co-product of the
 ethanol process, for use in biodiesel production.
     The Company markets E85, a blend of 85 percent ethanol and 15 percent
 gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel
 retailers under the brand VE85(TM). VE85(TM) is now available at more than
 90 retail locations. For more information, please visit VeraSun's Web sites
 at http://www.verasun.com or http://www.VE85.com.
     This press release contains "forward-looking statements" as defined in
 the Private Securities Litigation Reform Act of 1995. These statements are
 based on assumptions and assessments made by VeraSun's management in light
 of their experience and their perception of historical trends, current
 conditions, expected future developments and other factors they believe to
 be appropriate. Any forward-looking statements are not guarantees of
 VeraSun's future performance and are subject to risks and uncertainties
 that could cause actual results, developments and business decisions to
 differ materially from those contemplated by any forward-looking
 statements. Some of the factors that may cause actual results, developments
 and business decisions to differ materially from those contemplated by any
 forward-looking statements include the volatility and uncertainty of corn,
 natural gas, ethanol and unleaded gasoline prices; the results of VeraSun's
 hedging transactions and other risk mitigation strategies; operational
 disruptions at VeraSun's facilities; VeraSun's ability to implement its
 expansion strategy as planned or at all; VeraSun's ability to locate and
 integrate potential future acquisitions; VeraSun's ability to develop an
 oil extraction business; development of infrastructure related to the sale
 and distribution of ethanol; VeraSun's limited operating history; excess
 production capacity in VeraSun's industry; VeraSun's ability to compete
 effectively in its industry; VeraSun's ability to implement a marketing and
 sales network for its ethanol; changes in or elimination of governmental
 laws, tariffs, trade or other controls or enforcement practices;
 environmental, health and safety laws, regulations and liabilities;
 VeraSun's reliance on key management personnel; future technological
 advances; limitations and restrictions contained in the instruments and
 agreements governing VeraSun's indebtedness; VeraSun's ability to raise
 additional capital and secure additional financing; VeraSun's ability to
 implement additional financial and management controls, reporting systems
 and procedures; and costs of construction and equipment.
     A further list and description of these risks, uncertainties and other
 factors can be found in VeraSun's annual and quarterly reports filed with
 the Securities and Exchange Commission. Copies of those reports are
 available online at http://www.sec.gov or on request from VeraSun. VeraSun
 does not assume any obligation to update any forward-looking statements as
 a result of new information or future events or developments.
 
 

SOURCE VeraSun Energy Corporation

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