FARGO, N.D., Dec. 30, 2010 /PRNewswire/ -- Northstar Agri Industries, LLC announced today that it has secured a $100 million non–recourse, senior secured construction loan facility for the construction of its canola processing plant in Kittson county Minnesota. Northstar concurrently executed definitive agreements with PICO Holdings Inc. to provide $60 million in equity for an 88% ownership interest in Northstar Agri Industries. PICO Holdings Inc. previously announced this transaction in its press release on September 21, 2010. Northstar Agri Industries is an agribusiness concern that will build and operate a canola processing plant with an integrated refinery near Hallock, Minnesota. The plant is expected to be operational by the fourth quarter of 2012.
The total cost of the canola processing plant and integrated refinery is estimated to be $160 million. ING Capital LLC will serve as the administrative agent and lead arranger for the $100 million credit facility. The credit facility is underwritten and includes a $10.5 million working capital facility. PICO expects to close on the credit facility in Spring 2011.
Guaranteed Maximum Price construction, engineering, and technology contracts have been executed with Karges-Faulconbridge Inc., McGough Industrial Construction LLC, and Crown Iron Works. Each of these firms has significant prior experience in the industry. Construction is scheduled to begin on January 10, 2011. A ground breaking ceremony will be held at the plant site at 11:00 AM on January 11, 2010.
During construction, the project will create over 200 jobs for skilled craftsmen. When complete the plant will provide 47 full time jobs in Kittson county with a total payroll exceeding $3.5 million and significant related economic activity in the region.
Northstar Agri Industries, LLC is a development stage company made up of local and regional investors established for the purpose of developing a canola processing facility with integrated refinery in Kittson county, near Hallock, Minnesota. Under the agreements noted above, the original investor group has become a minority shareholder in the new entity, which will continue to do business as Northstar Agri Industries.
SOURCE Northstar Agri Industries, LLC