The SkunK sees some changes a foot. We are looking to buy and sell. First the buy: Expect we might see a purchase of another biodiesel plant. A good fit would include one we built. One that is west of NextDiesel, and one that we are presently selling corn oil to?? On my shopping list I have 'Close to at least two 50mmgy or one 100mmgy Ethanol plant we are contracted with'. 'Within range of a Midwest rendering facility'. 'Rail access and room to expand' 'A low dept ratio and some operating cash would also be nice.' Could it happen? Read below from the Annual: "We are currently exploring a number of opportunities in this regard".
Most of the existing U.S. biodiesel fleet is offline and the refineries that are operating are doing so with low and volatile margins that yield low enterprise valuations. This environment is far more of an opportunity to us than a threat; our intellectual properties, feedstock ownership and
hedged high margins position us to acquire qualified biodiesel production assets on favorable terms, which minimizes the capital intensity of our future construction efforts. p. 8,9 A'08
Most of the existing U.S. biodiesel fleet is offline and the refineries that are operating are doing so with low and volatile margins that yield low enterprise valuations. We believe that this environment presents us with compelling consolidation opportunities; we believe that our intellectual properties, feedstock ownership and hedged refining margins position us to acquire qualified biodiesel production assets on favorable terms. This can minimize the capital intensity of our expansion and accelerate our construction efforts. We are currently exploring a number of opportunities in this regard. p.17,18 A '08
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Looking to Sell?
"We also have some inactive and non-strategic investments that we intend to dispose or liquidate." p.17 A'08
Notice that on the chart on page 30 A'08, the Ottoville Plant, NextDiesel and Sustainable Systems are the only things listed as owned - not Leased or Operating Agreement. They are all either idled or shut down. That means we could sell them. I suspect that NextDiesel could be considered strategic, however the Sustainable Seed Crushing Plant is on the edge of 'strategery.' However, selling that '73 Vega in my yard with a bad title* has proven difficult, let alone a seed crushing plant. I expect the Ottoville plant to be gone soon. Not sure if the Van Wert facility is storage or not, however it is a lease. Expect action in this segment soon.
"As a result of these events, we halted all construction activities and idled our biodiesel refining and oilseed crush operations. We also reduced overhead during the latter half of 2008, we cut headcount down to 75 as of December 31, 2008 and to 38 as of April 1, 2009, and we shut-down our equipment manufacturing operations." p.33 A'08
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On a personal level it is hard to see over a hundred people cut from the Greenshift rolls. However, without the cash flow to meet payroll, it was obviously a necessary thing to do to keep the dream alive. Hopefully the economy, biofuels and this company will experience a quick recovery and these skilled workers will find employment with this or another company soon.
Good Luck,
SkunK
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PS. To explain my "bad title" reference above. It appears we were sold the seed crushing plant without clear title?
*". . . the notes payable to the prior owners of our oilseed crush facility ($4,821,738) pursuant to the relevant acquisition agreements are in default due to the failure by the selling shareholders to disclose that Sustainable did not hold title to its now-owned Culbertson, Montana oilseed crushing facility at the time of the acquisition by GS AgriFuels." p.37 A'08
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