| NEW YORK, March 18
NEW YORK, March 18 Oil refiner Valero Energy
(VLO.N) beat out Archer Daniels Midland (ADM.N) in buying bankrupt
VeraSun Energy Corp's VSUNQ.OB ethanol plants because ADM was
only interested in buying the entire company, a lawyer for VeraSun
said on Wednesday.
VeraSun announced on Tuesday that Valero, the largest U.S. oil
refiner, had won an auction to buy seven of its ethanol plants
while three VeraSun creditors would buy the rest of its plants for
a total of about $1.05 billion, topping ADM's bid of $700
U.S. Bankruptcy Court Judge Brendan Shannon told a hearing in
Wilmington, Delaware on Wednesday that he would approve the sale,
saying VeraSun had held "a thorough and complete auction."
Valero won the auction with a bid of $477 million, but will
pay about $537 million in total to cover working capital and other
costs. It expects to close the deal in April.
"The debtors truly are pleased with where we are today," Pat
Nash, lawyer for VeraSun, told the court.
"While ADM was only willing to acquire the whole company,
Valero was willing to acquire ... any number of the plants," Nash
said, adding that ADM's bid had totaled $700 million.
VeraSun, the nation's largest publicly listed ethanol maker,
filed for Chapter 11 bankruptcy protection in October last year
after it locked in corn prices near their highest levels of the
year, squeezing its margins as prices for ethanol weakened.
Valero had said in February it would pay $280 million for five
of the VeraSun plants, but that figure rose during an auction on
"We got Valero and ADM into the auction room bidding against
each other," Nash said.
Valero had submitted bids for each of the 16 plants owned by
VeraSun, as well as its four planned plants, but ADM's bid was for
all the plants together. Valero had also already received
antitrust approval for the purchases.
VeraSun listed debts of $1.91 billion and assets of $3.45
billion when it filed for bankruptcy protection.
While the Valero offer would give some money to unsecured
creditors of VeraSun who hold $450 million in securities, the
plants sold to the company's other creditors would not because
they had made "credit bids" in which they used their existing
claims against VeraSun.
The creditors that won bids under the auction were Dougherty
Funding LLC, which will pay $93 million for one plant, a
consortium led by AgStar Financial Services, which will pay $324
million for six plants and a group led by West LB AG, which will
pay $99 million for two plants.
Valero's winning bid includes $350 million for five plants in
South Dakota, Iowa and Minnesota and a development site in Indiana
that were grouped together under VeraSun Group.
It will also pay $72 million for an Iowa plant that VeraSun
had bought from U.S. Bio Energy last year, and $55 million for a
plant in Nebraska.
(Editing by Phil Berlowitz)