The proceeds from the $190 million sale will be used to pay off junior mezzanine debt and enhance the company's financial flexibility.
In a significant move aimed at strengthening its balance sheet and advancing its long-term strategy, Green Plains Inc. announced on August 27, that it has entered into an agreement to sell its ethanol plant located in Rives, Tennessee, to POET. The all-cash transaction is valued at $190 million, which includes an estimated $20 million in working capital, subject to adjustment at the time of closing.
The sale's primary objective is to enable Green Plains to fully retire its junior mezzanine notes, a debt obligation scheduled to mature in 2026. This action is expected to provide a substantial boost to the company's liquidity and enhance its overall financial health. The transaction is anticipated to be finalized during the third quarter of 2025, pending the satisfaction of customary closing conditions, including regulatory approvals. The agreement also includes standard representations, warranties, and indemnification obligations.
Chris Osowski, Chief Executive Officer of Green Plains, emphasized the importance of the sale in a recent statement. “The sale of our Obion facility reflects our continued commitment to unlocking value for shareholders and strengthening our balance sheet,” he said. “We have been actively pursuing opportunities that align with our long-term strategy and support disciplined capital allocation. This divestiture not only demonstrates the strength of our asset portfolio but also enables us to fully retire our junior mezzanine notes — a significant milestone in enhancing our financial flexibility and advancing Green Plains’ carbon reduction strategy.”
The announcement of the plant sale coincides with the conclusion of the company’s strategic review, a process that began in February 2024. The comprehensive evaluation involved a thorough assessment of a wide range of alternatives to create value for shareholders. Following this detailed review, Green Plains' Board of Directors determined that the company is best positioned for future success by continuing to execute its current strategy under its existing leadership. This decision provides a clear and defined roadmap for the company's path forward, focusing on operational excellence and maintaining capital discipline.
The transaction highlights Green Plains' focus on refining its portfolio and concentrating on its core competencies while shedding non-core assets. The move to retire debt and enhance liquidity is seen by many as a prudent financial strategy in a volatile market. The divestiture to POET, one of the largest ethanol producers in the world, also underscores the value of Green Plains' assets and its position within the biofuel industry.
