Bionol plant purchased for $9.35 million at auction
Nearly one year after it went into hot idle, the sale of the ethanol plant in Clearfield, Pa., has been approved in U.S. Bankruptcy Court. Pennsylvania Grain Processing LLC, affiliate of Zeeland Farm Services Inc., bid $9.35 million for Bionol Clearfield LLC, a 110 MMgy $270 million ethanol plant that began operations in early 2010. “The closing is expected May 8,” said Alfred Giuliano, the bankruptcy trustee.
Pennsylvania Grain Processing plans to restart the plant as soon as possible—sometime between the closing and fall harvest. “Through this acquisition, [the company] is poised to serve Pennsylvania with new market opportunities and economic development,” said Dan Meeuwsen, company manager. “It is our goal to develop viable business opportunities and promote job development as much as possible, helping to add value to the community and the agricultural industry in any way we can.”
The facility has been hot idle since last June and applied for Chapter 7 Bankruptcy protection in late July. However, employees have remained working, at the lenders’ request. “They felt the best value would be to keep it in hot idle but they also realized they would be retaining the jobs of the employees, and that was important to them,” Giuliano said.
Pennsylvania Grain Processing expects to hire on many of the existing and some additional employees, who will work to restart the plant, said Beth Westemeyer, marketing manager for the company. Zeeland Farm Services, a Michigan-based agribusiness, isn’t a newcomer to the ethanol industry. Nebraska Corn Processing LLC, a subsidiary of Zeeland Farm Services, operates a 44 MMgy corn-ethanol plant in Cambridge, Neb. The company purchased that facility in in 2009, Westemeyer said.
The ethanol plant’s financial troubles are related to a dispute with Getty Petroleum Marketing Inc., which had a 5-year contract to purchase ethanol from the plant with a commodity-based pricing formula. Just two months into the contract, Bionol said Getty breached that contract and starting paying less than the agreed-upon price. The two companies went into arbitration and, in August, Bionol won a $230 million arbitration case against Getty. That money has yet to be collected, however, as Getty filed for bankruptcy in December, Giuliano said. Once that case works its way through the courts the money that is paid to Bionol will be distributed to that company’s creditors, he added.