REX American Resources Corp. (REX) announced that it has, through a wholly-owned subsidiary, signed a definitive agreement to acquire an about 48% equity ownership interest in NuGen Energy LLC.
REX has agreed to acquire its ownership interest for $9.2 million with a commitment of up to an additional $6.5 million based upon the future profitability of NuGen.
Upon completion, the investment will increase REX's overall ownership interest of annual nameplate capacity ethanol production by about 33%.
REX noted that it intends to fund its initial investment from cash on hand, and at April 30, 2010, REX had cash and cash equivalents of $101.4 million, including $86.1 million of cash at the parent company. The closing of the transaction is expected to occur by the end of July 2010.
Upon completing the NuGen investment, REX will have interests in seven ethanol production facilities representing REX ownership of about 191 million gallons per year of annual nameplate capacity.
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