New U.S. Corn Processing and Ethanol Plants

Opportunity Snapshot

Investment Opportunity

A U.S. renewable energy development company is looking for equity investors to participate in the financing of two corn processing and ethanol production facilities located in the Midwest region of the U.S.A.

The ethanol produced by these plants can be shipped to the People’s Republic of China. The size of the investment is at least $15,000,000.00, and up to $150,000,000.00. It will supplement a 30-year tax-free bond, which covers approximately 70% of the total project costs. This bond is placed by a large investment bank in New York.

All the construction plans of both facilities are drawn. All the necessary permits are issued. Construction is ready to start, by firms with an excellent reputation and large experience in designing, building and operating corn processing plants. Each facility will implement the latest, proven technologies to manufacture seven high quality products from U.S. corn. The corn plant stems and residues will be burned in an environmentally clean way and generate all the power necessary to operate each facility. Therefore, the operation of these facilities will be very profitable in contrast to ethanol plants of the first and second generation. A contract is already in place to sell one third of the ethanol produced to a large commodity trading firm, with its parent company in Hong Kong.

The conservative financial projections on each plant show an annual net income at the end of the third year of $15,000,000.00 for the smaller one, and of $ 41,500,000.00 for the larger one. The investment request of $ 50,000,000.00 and $ 100,000,000.00 is for combined equity and subordinated debt at 6% APR. Assuming that the investor accepts a 30% share of the company stock in each plant, then the investment will yield an annual rate of return close to 44 % at the end of the third year.

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