VeraSun gets court OK of bid procedures for sale of substantially all assets

By Jennifer Lanning Drey

Portland, Ore., Feb. 19 - VeraSun Energy Corp. obtained court approval of the bidding procedures for the proposed sale of all of its assets Thursday from the U.S. Bankruptcy Court for the District of Delaware, according to an attorney.

As previously reported, the company has signed a stalking horse agreement with Valero Energy Corp. to sell substantially all of the company's assets related to production facilities in Aurora, S.D.; Charles City, Fort Dodge and Hartley, Iowa; and Welcome, Minn., as well as a development site in Reynolds, Ind., for $280 million, plus the value of inventory and some pre-paid expenses.

Under the bid procedures, the company is looking to sell all of its production facilities and operations in separate or combined transactions.

Bids are due by March 13. If qualifying bids are received, the company will conduct an auction on March 16.

If VeraSun decides to move forward with an alternate or standalone transaction, it will pay the stalking horse bidder a $10 million break-up fee and reimburse up to $1 million of its expenses.

Competing bids must be for at least $291,000, plus the fair market value of inventory at closing. All bids must include a 5% deposit.

The company previously said it expects the sale to close by March 31 or early in the second quarter.

VeraSun, based in Brookings, S.D., produces renewable fuel. The company filed for bankruptcy on Oct. 31 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-12606.

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