By Drax Biomass
April 10, 2017 - Drax Biomass has been selected as the winning bidder for the acquisition out of bankruptcy of Louisiana Pellets. The announcement follows a multi-week competitive bidding process which culminated in an auction on March 30.
By Drax Biomass
Located in the central Louisiana town of Urania, Louisiana Pellets operates a wood pellet manufacturing facility capable of producing approximately 450,000 metric tons per year. The facility filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the Western District of Louisiana in February 2016, and has recently idled production.
Drax Biomass has previously signaled its intent to pursue the acquisition of financially distressed pellet manufacturing assets. The purchase of such assets will support the company’s strategy of more than doubling our current production capacity to self-supply 20-30% of Drax Power Station’s demand while also competing for supply contracts in new biomass markets. Drax Biomass currently operates two pellet manufacturing facilities in Bastrop, Louisiana and Gloster, Mississippi, as well as a port storage and transit facility in Port Allen, Louisiana.
“We’re thrilled with the outcome of last week’s auction,” said Pete Madden, President and Chief Executive Officer of Drax Biomass. “Louisiana Pellets sits in the middle of a healthy and vibrant wood basket and is served by modern infrastructure, making it an ideal addition to our asset portfolio. We’re excited by the prospect of joining Urania’s business community, and we look forward to increasing our presence in Louisiana, which has been a key partner in our growth as a business.”
Last week’s auction results are contingent upon a court-approved sale of the assets, with the sale hearing currently scheduled for April 4, 2017. If approved, Drax Biomass intends to close on the sale by the end of April.