Western Iowa Energy rejects REG merger
February 23, 2010
BY Ron Kotrba
Posted March 1, 2010
Shareholders of Western Iowa Energy LLC in Wall Lake, Iowa, recently voted down the proposal to consolidate its assets and liabilities under Renewable Energy Group Inc.'s umbrella.
The proposal, which has been in the works for nearly a year, was voted down by a narrow margin, with 40 percent of the unit holders voting against the agreement and 38 percent voting for it, according to Western Iowa Energy's Securities and Exchange Commission filings.
Larry Breeding, general manager for the 30 MMgy Western Iowa Energy biodiesel plant, told Biodiesel Magazine that this shareholder rejection was not a mandate one way or the other, but instead was "just not the right business deal at the right time."
"There just weren't enough voters," he said, adding that at least 50 percent shareholder approval was needed for the REG consolidation agreement to go through. Breeding said if more shareholders were to have voted, the situation may have turned out differently.
Alicia Clancy with REG said this consolidation process has been a very complex business deal, and, "as one would expect, not all deals receive positive shareholder votes. [Western Iowa Energy] and REG have been excellent business partners in the past, as [it] is a member of the REG network of managed plants."
The Wall Lake plant will continue operating as Western Iowa Energy, which is governed by an REG management contract that Breed said will have to be renegotiated.
In related news, another Iowa biodiesel plant involved in the same consolidation agreement with REG, Central Iowa Energy LLC, voted overwhelmingly to approve the merger with 81 percent of its shareholders in favor of the consolidation agreement and only 1 percent against it.
Clancy also said Danville, Ill.-based Blackhawk Biofuels LLC voted to approve the arrangement.
Shareholders of Western Iowa Energy LLC in Wall Lake, Iowa, recently voted down the proposal to consolidate its assets and liabilities under Renewable Energy Group Inc.'s umbrella.
The proposal, which has been in the works for nearly a year, was voted down by a narrow margin, with 40 percent of the unit holders voting against the agreement and 38 percent voting for it, according to Western Iowa Energy's Securities and Exchange Commission filings.
Larry Breeding, general manager for the 30 MMgy Western Iowa Energy biodiesel plant, told Biodiesel Magazine that this shareholder rejection was not a mandate one way or the other, but instead was "just not the right business deal at the right time."
"There just weren't enough voters," he said, adding that at least 50 percent shareholder approval was needed for the REG consolidation agreement to go through. Breeding said if more shareholders were to have voted, the situation may have turned out differently.
Alicia Clancy with REG said this consolidation process has been a very complex business deal, and, "as one would expect, not all deals receive positive shareholder votes. [Western Iowa Energy] and REG have been excellent business partners in the past, as [it] is a member of the REG network of managed plants."
The Wall Lake plant will continue operating as Western Iowa Energy, which is governed by an REG management contract that Breed said will have to be renegotiated.
In related news, another Iowa biodiesel plant involved in the same consolidation agreement with REG, Central Iowa Energy LLC, voted overwhelmingly to approve the merger with 81 percent of its shareholders in favor of the consolidation agreement and only 1 percent against it.
Clancy also said Danville, Ill.-based Blackhawk Biofuels LLC voted to approve the arrangement.
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