Noble to sell US ethanol producer for US$12.5m plus adjustments

BELEAGUERED commodities trader Noble Group is selling its US-based ethanol producing business for US$12.5 million plus adjustments for working capital, inventory and debt.

If the deal was closed on Oct 1, the gross consideration would have been US$17 million, assuming net working capital of US$0.9 million, inventory value of US$3.6 million and no debt as at Sept 30 for the business, which is called North Americas South Bend Ethanol (NASBE).

NASBE, which owns and operates an ethanol production plant in South Bend, Indiana, had a book value of around US$80.4 million as at Sept 30, with a net tangible asset value of US$80.4 million.

Family-owned agricultural and transportation services firm Zeeland Farm Services is the buyer.

The sale comes as Noble is selling off its global oil liquids business. NASBE is fully held by Noble Americas Corp (NAC), which Noble is selling to Vitol US Holdings.

Vitol, which had planned to sell NASBE after the acquisition of NAC, has agreed to allow Noble to sell NASBE before or simultaneously with the NAC takeover.

If the NASBE sale to Zeeland Farm takes place before or together with the NAC sale, the base consideration for NAC, which was US$217 million as at July 1, will be reduced by one quarter of the proceeds received from the NASBE sale.

If the sale of NASBE falls through, Vitol will carry on with its plans to proceed with its own sale of NASBE after the NAC deal is completed.