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Potential buyers have until Sept. 24 to submit bids for the $100 million Gateway Ethanol Plant.
The bank group, composed of the original senior lenders and other banks, formally took possession of the plant and it’s related assets when the asset sale closed on June 30 established the Sept. 24 deadline for potential buyers, said Kirk Martin, managing partner of Ascendant Partners, a business and financial advisory firm that is working with the bank group to find buyers for the plant.
After over two years since Gateway Ethanol declared bankruptcy in February 2008, the last of the issues preventing the sale of the plant was cleared and the bank group can now proceed with selling the plant.
The last issue was the validity of an Indeck Power boiler lease. A bankruptcy judge ruled the lease valid, Gateway rejected the lease and the boiler was removed.
For legal purposes the plant and related assets are now called Gateway Plant.
The plant and the related assets are now separated from Gateway Ethanol and the bankruptcy issue so they can be sold, said Ted Loomis, Gateway Ethanol chairman of the board of directors.
Gateway Ethanol is still dealing with the bankruptcy and is waiting to see if Indeck Power wants to file more objections. If Indeck doesn’t have any more objections the bankruptcy can finally be resolved, Loomis said
In the mean time interest in the plant is high because it was over-designed for expansion, it has lots of land for development, it has access to water and electricity, the rail loop is in place, it can ship by truck or rail, it has ample access to the necessary grain and the structure itself is a world class ethanol facility. With that kind of attraction, now that the last legal hurdle has been cleared, bids are expected soon, Martin said.
“Although we have no offers at this point, we expect to see credible offers coming forward,” Martin said. “We’re talking to a number of interested parties.”
Along with all the positive aspects, ICM, a premier ethanol firm, has documented improvements to the plant and that information will be available to potential buyers.
The group of banks that now owns the plant and related assets is anxious to sell. They will consider any offer made before the Sept. 24 deadline. If it’s a good bid they are in a position to accept the bid before the deadline.
Potential buyers have until Sept. 24 to submit bids for the $100 million Gateway Ethanol Plant.
The bank group, composed of the original senior lenders and other banks, formally took possession of the plant and it’s related assets when the asset sale closed on June 30 established the Sept. 24 deadline for potential buyers, said Kirk Martin, managing partner of Ascendant Partners, a business and financial advisory firm that is working with the bank group to find buyers for the plant.
After over two years since Gateway Ethanol declared bankruptcy in February 2008, the last of the issues preventing the sale of the plant was cleared and the bank group can now proceed with selling the plant.
The last issue was the validity of an Indeck Power boiler lease. A bankruptcy judge ruled the lease valid, Gateway rejected the lease and the boiler was removed.
For legal purposes the plant and related assets are now called Gateway Plant.
The plant and the related assets are now separated from Gateway Ethanol and the bankruptcy issue so they can be sold, said Ted Loomis, Gateway Ethanol chairman of the board of directors.
Gateway Ethanol is still dealing with the bankruptcy and is waiting to see if Indeck Power wants to file more objections. If Indeck doesn’t have any more objections the bankruptcy can finally be resolved, Loomis said
In the mean time interest in the plant is high because it was over-designed for expansion, it has lots of land for development, it has access to water and electricity, the rail loop is in place, it can ship by truck or rail, it has ample access to the necessary grain and the structure itself is a world class ethanol facility. With that kind of attraction, now that the last legal hurdle has been cleared, bids are expected soon, Martin said.
“Although we have no offers at this point, we expect to see credible offers coming forward,” Martin said. “We’re talking to a number of interested parties.”
Along with all the positive aspects, ICM, a premier ethanol firm, has documented improvements to the plant and that information will be available to potential buyers.
The group of banks that now owns the plant and related assets is anxious to sell. They will consider any offer made before the Sept. 24 deadline. If it’s a good bid they are in a position to accept the bid before the deadline.
The banks want to sell the plant. They don’t want to operate the facility and are anxious to sell it because it’s not making the banks money just sitting there. They want to get it in the hands of an experienced group that can make the facility operate.
“They are fairly motivated to market the asset to someone who will operate it,” Martin said.
During the two plus years since the bankruptcy the plant has been maintained so it will be ready for the future buyer. Valves were turned, certain elements were started, and fluids were drained to keep the plant ready for the potential new owner. It still needs some improvements but the efforts over the last two years will make it quick to start production once the plant is sold.
“It’s a short line between getting it up and operational,” Martin said.
Even though it has not been operational, financial obligations have been kept up to date. All county taxes have been paid in full along with all monthly payments for the water line.
“The city and county have not lost a cent,” Martin said.
While efforts are made to sell the plant, Gateway Ethanol is still working on the bankruptcy issue.
The last barrier to clearing the bankruptcy was the validity of an Indeck Power boiler lease. After Gateway Ethanol rejected the valid lease the boiler was removed and that allowed the plant and related assets to be clear of the bankruptcy and go through an asset sale where the primary banks that were the senior lenders for the plant became the owners and are marketing the plant through Ascendant Partners, Loomis said.
The bankruptcy will not be resolved until Indeck Power has no more objections. All other objections to the bankruptcy have been resolved.
If Indeck has no more objections, Gateway will probably ask to dismiss the bankruptcy and the court will probably agree, said Ted Loomis, Gateway Ethanol chairman of the Board of Directors.
If Indeck has more objections, Gateway may file for Chapter 7 or total liquidation.
It’s too early to say which way Indeck goes but the judge is not going to make a final ruling on the bankruptcy until Indeck is satisfied.
“We’ll have to roll with the punches,” Loomis said.
