WATERTOWN, S.D. -- Glacial Lakes Energy, LLC of Watertown, S.D., announced Tuesday is has completed the sale of 2,000 units of Granite Falls Energy to Fagen Inc. of Granite Falls.
The transfer essentially brings to a close a relationship between two ethanol companies that had soured in recent years.
With the transfer, Glacial Lakes Energy will no longer have the right to seat two members on the Granite Falls Energy board of managers. An effort by the Granite Falls Energy board of managers to unseat the two Glacial Lakes Energy representatives had been the focus of civil litigation earlier this year.
Glacial Lakes Energy originally invested $6.5 million and acquired 6,500 shares in Granite Falls Energy LLC when the Granite Falls company was raising equity to build its 50-million-gallon-per-year plant. The 6,500 block of units provided Glacial Lakes Energy with the right to seat two members on the Granite Falls Energy board of managers.
The new transaction lowers Glacial Lake Energy's ownership in Granite Falls Energy from 21 percent to 15 percent. Glacial Lake Energy will no longer hold two seats on the board of managers, the news release noted.
Glacial Lakes Energy had entered into a purchase agreement with Fagen Inc. in December 2008 to allow the transfer of 2,000 shares, but Glacial Lakes reserved the right to sell its 6,500 shares as a block.
Glacial Lakes Energy reported that it explored its options to sell its Granite Falls Energy units as a block, but could not find an acceptable offer. It cited the downturn in the ethanol market and other opportunities for investors to acquire entire plants.
"In the end, it became difficult to compete with these opportunities at what our board would consider a fair price,'' stated CEO Jim Seurer of Glacial Lakes Energy.
"After exhausting all of our leads, our board agreed to release the shares to Fagen Inc., as there is no reason to prolong the sale.''
Glacial Lakes Energy will continue to own 4,500 units in Granite Falls Energy, but would sell its units if an appropriate offer was received, according to the company.