BY EPM Associate Editor Jessica Williams and Staff Wr
Members of Midwest Grain Processors (MGP) Cooperative, the majority owner of MGP LLC, a Lakota-based ethanol producer, voted March 30 to approve the sale of 60 percent of the limited liability company to Global Ethanol Holdings Pty. Ltd., based in Brisbane, Australia.
Out of 1,065 ballots cast in the voting, 717 or 67.3 percent were in favor of the sale, with 348 votes cast against the proposal. The 1,065 votes cast represented a participation by nearly 83 percent of the cooperative's members. The cooperative has nearly 1,300 farmer members in 10 Midwestern states.
According to David Nelson, chairman of the board of MGP Cooperative, the closing is expected to occur in April, and the company will immediately begin to move forward with plans to double or triple the 100 MMgy ethanol plant in Lakota, Iowa, and the 57 million gallon plant currently under construction in Riga, Mich. The company, under Global Ethanol's leadership, is also pursuing the construction of a 100 MMgy ethanol plant in Illinois.
"The outlook for the farmer-owners is tremendously bright," Nelson said. "They will receive nice checks in the mail in the next few months, and we will then look forward to communicating with our members about new opportunities."
According to Nelson, talks between MGP and Global Ethanol initially began back in September. "We talked about philosophies and strategic plans," Nelson told EPM. "Around the first of the year, talks had gotten more heated. They got to know who we are, and we got to know more about who they are. We started talking more about a deal. Then, around the first of February, they came to us with an offer, and we had to shut down trading of the co-op shares."
In February, Nelson told EPM that Global Ethanol has also expressed interest in purchasing Southwest Ethanol, which has been approved to build a 60 MMgy ethanol plant near McCook, Neb. Nelson said MGP is placing its ethanol production target at the 1 billion gallon mark by 2012.
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