VeraSun unveils IPO to finance US ethanol plants

14 June 2006 17:09  [Source: ICIS news]

HOUSTON (ICIS news)--VeraSun Energy, the second-largest US ethanol producer, unveiled a 18,250,000-share initial public offering (IPO) to partially finance construction of two ethanol plants in the upper Midwest.

The IPO shares were priced at $23/share.

VeraSun said in a filing with the US Securities and Exchange Commission that it would receive an estimated $232.2m (€183.8m) in net proceeds from the IPO. The company said it planned to use the proceeds to finance a portion of construction costs of a northwest Iowa facility and another facility. Construction costs were estimated at $280m. The company said it also planned to use cash on hand and cash generated from operations to pay for the construction.

In addition to being the second-largest US ethanol producer (behind Archer Daniels Midland), VeraSun said it is the largest “pure-play” ethanol producer, focusing primarily on the production and sale of ethanol and its co-products.

VeraSun said it owns and operates two of the largest ethanol production facilities in the US with a combined capacity of 230m gallons/year. Its ethanol production capacity represented about 5% of the total ethanol production capacity in the US.

VeraSun traded on Wednesday morning at $29.90/share, up $6.90 (30%) on the New York Stock Exchange.

By: Brian Ford
+1 713 525 2653

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