By Dayton Business Journal

One of Rex American Resources Corp.â¿¿s subsidiaries acquired roughly a half interest in a South Dakota ethanol plant.

The Dayton-based alternative energy investor entered into an agreement to acquire an approximate 48 percent equity ownership interest in NuGen Energy LLC for $9.2 million, with a commitment of up to an additional $6.5 million based upon the future profitability of NuGen Energy. The closing of the transaction is scheduled to occur by the end of July.

After completing the acquisition, the investment will increase Rexâ¿¿s (NYSE: REX) overall ownership interest in ethanol production by approximately 33 percent.

NuGen Energy, a subsidiary of Central Farmers Cooperative, operates a 100 million gallon ethanol plant in Marion, S.D.

Rex plans to fund the initial investment from cash on hand. At the end of April, Rex had cash and cash equivalents of $101.4 million, including $86.1 million of cash at the parent company.

After the acquisition, Rex will have interests in seven ethanol production facilities representing Rex ownership of approximately 191 million gallons per year of annual capacity. The total annual capacity of ethanol production facilities in which Rex has ownership interests is approximately 632 million gallons per year.

Rexâ¿¿s stock was down 2.8 percent, or 45 cents, to $15.55 per share in mid-morning trading.

Copyright 2010 American City Business Journals
Copyright 2010