Glacial Lakes repays shareholders $11 million

By | August 27, 2010
News release posted Sept. 2, 2010

The Glacial Lakes Corn Processors Board of Directors declared and authorized repayment of the $0.06 per share non-qualified unit retain assessed to its shareholders two years ago. The action will result in over $11.1 million returned to its investors, the majority of which are South Dakota residents. The repayment will be made in one or more installments during the company's 2011 fiscal year which runs from Sept. 1 to Aug. 31, 2011. Although the dates of the repayment during fiscal year 2011 have not been established, the repayment will be made to shareholders of record on August 31.

GLCP Board Chairman Mark Schmidt considers this an important juncture for GLCP investors, South Dakota's value added agriculture industry, and corn producers in the draw areas of the company's Watertown and Mina, SD plants. "In 2008, after GLCP as well as others in the industry encountered serious financial difficulties, we had two options, neither of which was desirable. One was to declare bankruptcy and the other was to approach our shareholders and ask for their help. We chose the latter," states Schmidt. "Our board and management believe this action demonstrates our continued success in restoring the financial health and viability of our company and we believe the time has come to repay our investors. This provides our investors reassurance that our strategic initiatives are working and we will aggressively continue our efforts to complete strategic plan goals and objectives. At the same time, we will remain careful and cautious as we move forward."

As a South Dakota cooperative, GLCP was able to assess a $0.06 per share prepaid unit retain and the response provided $11.1 million at a time when working capital was critically needed to honor producer corn contracts and help the company survive. "We had an outstanding response rate of 99 percent from approximately 4,200 GLCP investors. This provided inspiration for our directors, management and employees and underscored the importance on what we needed to do to turn this company around," states Chief Executive Officer Jim Seurer. "First and foremost, we owe our existence to the GLCP investors who put more funds at risk at a time when it was difficult to do so." Although quick to acknowledge that the return of favorable market conditions played a major role, Seurer says a dedicated and focused effort by the directors, management, and employees also made a critical difference. "It has been a unified effort since Day One, from the GLCP shareholder all the way to the employees, all of whom are committed to same mission: adding value to South Dakota agriculture and preserving the financial viability of the GLCP investment."

Looking forward, management expects 2011 to be a challenging year but optimism remains. GLCP's financial forecast points to narrow corn to ethanol margins and a tight supply of corn in the Mina plant draw area. "Even with these issues, we believe we have the financial stability and it is appropriate to return these funds to our shareholders. Just as we have in the past, we will find a way to work through these challenges," says CEO Seurer.

SOURCE: Glacial Lakes Corn Processors