REGINA – The sale of the Terra Grain Fuels ethanol plant at Belle Plaine was completed Tuesday with a consortium of Saskatchewan-based financial institutions taking over the plant from Just Energy.
"The sale of Terra Grain Fuels closed in the last hour,” said Calvin Eyben, general manager of the plant. "So the new owners are Conexus (Credit Union), Concentra Financial and Farm Credit Canada.” All three institutions had a stake in the original deal to finance the construction of the plant, which cost $150 million when it came on stream in 2008.
"They’ve been with us from day one,” Eyben said. "They’re interested in the business and they want to keep … the plant going.” Earlier this month, the Mississauga, Ont.-based energy marketing company said it had agreed to sell Terra Grain Fuels to a group of Saskatchewan businesses, including its $68 million debt, for a "nominal purchase price." The deal was expected to close on or before Dec. 24.
The ethanol plant, which was part of the acquisition of Universal Energy Group Ltd. in 2009, was not considered a core asset of Just Energy. "We have worked to bring the plant up to its production capacity," Rebecca MacDonald, executive chair of Just Energy, said in a press release Dec. 12. "However, difficult market conditions for ethanol production confirmed our initial view that this was a non-core asset to Just Energy."
Eyben said the plant has been working at "over 100 per cent capacity." "With the new ownership structure, it’s going to give comfort to our employees, and our suppliers and our customers." The plant currently employs 45 workers. Darren Stoppler, chief risk officer with Conexus, confirmed that the transaction with Just Energy has been completed with three of the original stakeholders.
Terra Grain Fuels was announced in 2006 as North America’s largest wheatbased ethanol producer at 150-million litres a year. But instead of its projected capital cost of $115 million to $130 million and a completion date of late 2007, the plant cost $150 million when it began production in mid-2008. The plan also struggled with high-thanexpected feedstock costs, as feed wheat prices doubled, while ethanol prices tanked.
But Eyben said the industry is on the upswing. "It’s a cyclical industry; it goes up and down. Right now, we’re in a cycle where the grain prices are lower and ethanol prices are stronger. For the foreseeable future, it looks good."
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