VeraSun may renew Indiana land development option as ethanol outlook brightens

In Indiana, VeraSun Energy has indicated interest in renewing a development option on a site in Tipton County.

The site was previously optioned by ASAlliances, which was acquired by VeraSun in August. The original ASAlliances plan projected a $170 million ethanol plant.
VeraSun Energy halted construction of its 110 Mgy corn ethanol plant in Reynolds, IN due to the fall in ethanol prices. The company said it would restart construction in 2008. Around this time, The Wall Street Journal profiled the difficult financing environment for new ethanol plants, with cancellations and delays becoming a norm. A partner at Baker & McKenzie described some plants as “under death watch”.

In August, VeraSun closed its acquisition of three ethanol plants from ASAlliances Biofuels with a production capacity of 330 million gallons per year. VeraSun now has 450 million gallons of annual production capacity, and 550 million gallons under construction. The plants are located in Indiana, Nebraska and Ohio. The acquisition price was $725 million in a combination of cash, equity and project finance.

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