Farmland sells Coffeyville plant, the last of its big assets
Thursday, March 4th 2004, 12:00 am
By: News On 6
KANSAS CITY, Mo. (AP) _ Farmland Industries Inc. has completed the sale of its last big asset, a refinery and fertilizer plant in Coffeyville, Kan.
The sale, completed Wednesday, clears the way for the bankrupt company, once the largest farmer-owned cooperative in North America, to pay about 60,000 creditors, probably in June.
Coffeyville Resources, an affiliate of Pegasus Capital Advisors of Greenwich, Conn., paid about $22 million in cash, $85 million in working capital and $174 million in assumed liabilities for the complex.
The sale had been awaiting an agreement between Kansas City-based Farmland, the Environmental Protection Agency and Coffeyville Resources, which also had to reach agreements with crude oil and pipeline suppliers.
``We are very pleased to finally have gotten to closing on this asset, which we have been trying to sell for years,'' said Bob Terry, Farmland's chief executive officer. ``We feel good that the buyer has committed to make substantial investments, so this should be a stable and strong operation for years to come.''
Terry said some work still must be done before the company's plan to repay unsecured creditors can become effective, which he expected will happen in early April. After that, the company must wait 45 days to make sure all claims have been submitted and reviewed. Within days after that, Farmland expects to make a first payment to unsecured creditors, Terry said.
U.S. Bankruptcy Judge Jerry Venters approved the bankruptcy plan in December, contingent upon Farmland selling the refinery and fertilizer plant.
Farmland, which filed for Chapter 11 bankruptcy protection on May 31, 2002, has estimated that unsecured creditors will receive 60 cents to 82 cents on every dollar they are owed.
Shyrlee Davis, of Independence, invested $60,000 in Farmland bonds after selling the family farm.
``This has been a real strain. I will be glad to have it all ended,'' Davis said. ``Still, I really hate that Farmland is gone. That was part of our life for so long. I still tell the kids, 'Buy Farmland.' I am loyal. I guess that is one of my greater failings.''
While Farmland still has some assets, including a grain handling system it leases to Archer Daniels Midland, the refinery complex was the last of the units Farmland operated. It already had sold its pork, beef and fertilizer businesses.
Coffeyville Resources, which will have its home office in Kansas City, Kan., will employ about 410 people at the Coffeyville site and at outlying locations in southeast Kansas, north-central Kansas and Oklahoma, chief executive Phil Rinaldi said.