Communities ‘hopeful' waiting for WestLB's next move on ethanol plants

By Ryan C. Christiansen | March 05, 2009
Web exclusive posted April 14, 2009, at 2:50 p.m. CST

It has been several weeks since a group of lenders led by German financial giant WestLB AG won the bid to acquire two U.S. ethanol plants through VeraSun Energy Corp. bankruptcy proceedings. The group of lenders submitted a credit bid of $99 million to acquire ethanol plants in Bloomingburg, Ohio, and Linden, Ind., on March 18. However, WestLB has yet to close the deal. "We are still analyzing the situation," said Connie J. Kain, a spokesperson for WestLB in New York, N.Y.

Meanwhile, folks in rural Ohio and Indiana are waiting on the edges of their seats to know what the next move will be for a German bank with €288.1 billion ($402 billion) in accumulated assets as of Dec. 31, 2008. "Our hope is that we can see the steam coming from the stack again," said Rob Hedrick, director for the Fayette County Economic Development Department in Washington Court House, Ohio. "We're still in a wait-and-see mode."

Hedrick said as of last week, the employees at the VeraSun Bloomingburg plant were still receiving paychecks and are ready to get to work again. The plant opened in March 2008. The plant was built to process 39 million bushels of corn pear year into 110 million gallons per year of ethanol and 350,000 tons of distillers grains.

"We would hope that someone will see the value in the property and the location and buy it to operate it," Hedrick said. "This is one of the newer ethanol plants that have been built. It's only basically a year old. It has the best technology that is available and high production capabilities and so we feel it's a good asset at a very good location. We've got a really good trained workforce that's already there. There is concern, but also hope. We're very cautiously optimistic."

VeraSun acquired the plants in Bloomingburg and Linden during the second half of 2007. The plants were originally built by Demeter Enterprises LLC, which included Cargill Inc. as a partner. Cargill AgHorizons grain elevators have been principal grain suppliers for the plants.

Hedrick said he isn't aware of any companies that might be ready to step in and purchase the plant from WestLB's group of lenders. "The feeling is that someone paid some money for it and so they must see it as an asset," he said. "I think the hope was that somebody would buy it and then turn the switch back on right away, but we don't know whether that's going to happen or not."