VeraSun Energy Corp. asked a bankruptcy court Friday for permission to sell most of its assets by March 31, including the Fort Dodge production plant.
The Valero Energy Corp., North America's largest refining company, proposed a $280 million purchase agreement that would allow the sale of five VeraSun production plants including those located in Fort Dodge, Charles City and Hartley.
The deal comes as a separate agreement from the one through which VeraSun placed five of its plants - including the now defunct Albert City and Dyersville facilities - on the auction block.
"Given current difficult industry conditions and continued constrained credit markets, we believe that commencing a sale process is in the best interest of our stockholders," said Don Endres, VeraSun's chief executive officer.
VeraSun will hold an auction for other bidders to offer more favorable terms than Valero's bid. Bidders have until March 13 to submit qualifying bids. If bids are received, the company will conduct an auction on March 16.
VeraSun said it has enough liquidity to maintain production facilities and staff through the sale process.
About Valero Energy Corp.
Valero Energy Corp. is a Fortune 500 company based in San Antonio, Texas, and incorporated in Delaware. Valero's common stock is listed for trading on the New York Stock Exchange under the symbol "VLO." The company has approximately 22,000 employees and assets valued at $38 billion.
The largest refiner in North America, Valero has an extensive refining system with a throughput capacity of approximately 3.1 million barrels per day. The company's geographically diverse refining network stretches from Canada to the U.S. Gulf Coast and West Coast to the Caribbean.
Valero has a mid-stream logistics system that supports Valero's refining and marketing operations.
A marketing leader, Valero has approximately 5,800 retail and wholesale stores in the United States, Canada and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon. The company markets on a retail and wholesale basis through a bulk and rack marketing network in 44 U.S. states, Canada, Latin America and the Caribbean.
Valero has long been recognized throughout the industry as a leader in the production of premium, environmentally clean products, such as reformulated gasoline, California Air Resources Board Phase II gasoline, low-sulfur diesel and oxygenates.
Annual 2007 Revenues: More than $95 billion
Total Assets: $38 billion
Number of Employees: 21,798 (EOY 2007)
Refining Throughput Capacity: 3.1 million barrels per day
Number of Retail and Wholesale Sites: Approximately 5,800
Number of Wholesale Markets: Valero markets products in 44 U.S. states, Canada, Latin America and the Caribbean region
-Valero Energy Corp.
If the proposal moves forward, Valero would purchase the plants, and operate them under the Valor name, said Bill Day, director of media relations for Valero Energy Corp.
Day said he does not expect the sale of the plants to result in any layoffs.
"If everything goes through, which may be as early as March, we intend to operate each plant with its existing work force," Day said.
The San Antonio, Texas-based Valero operates petroleum refinery facilities on the Gulf, East Coast and West Coast, and is a large purchaser of ethanol. They currently do not own any ethanol production plants.
"Purchasing these ethanol plants and developing an ethanol business would complement Valero's portfolio and provide long-term growth opportunities for our shareholders," Day said.
The company tried to raise $20 million in a public offering in mid-September, but later scrapped that plan to allow Morgan Stanley to help it evaluate "strategic alternatives" involving anything from a buyout to a partial sale of assets. VeraSun and 24 of its subsidiaries filed for chapter 11 bankruptcy on Oct. 31, 2008.
Contact Emilie Nelson at 573-2141 or firstname.lastname@example.org