By PETER HUSSMANN
Renewable Energy Group's acquisition of the Jasper County biodiesel plant is expected to take another step toward completion today when the Jasper County Board of Supervisors acts on an assignment and assumption agreement between the two companies and the county and agrees to a subordinate financial position with plant's new lender.
REG Newton, a limited liability company set up with plans of acquiring virtually all of the assets of Central Iowa Energy's Jasper County biodiesel plant, has agreed to have assigned and assume the redevelopment agreement and minimum assessment agreement the county entered into with CIE in November 2006 for construction of the plant.
Under the terms of the agreement, Central Iowa Energy agreed to build a 30 million gallon a year biodiesel plant with a total investment of $38 million in return for the county's cost of constructing $745,000 in sewer improvements to the site.
Jasper County is also waiving a past issue of noncompliance by Central Iowa with the terms of the agreement for failing to timely file an annual report with the county. A November SEC report filed by Central Iowa Energy also noted that it was out of compliance with the terms of the agreements for failing to make its $123,700 property tax installment payment. Offices at the Jasper County Courthouse were not open at this hour to determine if that default had been cured. (Additional information: Jasper County Treasurer Doug Bishop said the tax payment remains outstanding and now sits at $129,288 including interest. He plans to provide county supervisors a memo today noting the outstanding tax debt.)
The county is also expected to agree to a subordinating its financial interest under the terms of the redevelopment agreement to AgStar Financial Services, the lending institution that purchased the interests of Central Iowa Energy's former lender, F&M Bank.
Since the Jasper County biodiesel plant's start in April 2007, the company has generated net losses of $14.3 million. For the fiscal year ended Sept. 30, losses amounted to $7.9 million. The plant produced just five million gallons of biodiesel last fiscal year, 17 percent of its capacity.
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