ATLANTA, GA – Drax Biomass, a leading manufacturer of sustainably sourced compressed wood pellets, announced today that it has been selected as the winning bidder for the acquisition out of bankruptcy of Louisiana Pellets(1). The announcement follows a multi-week competitive bidding process which culminated in an auction on March 30.
Located in the central Louisiana town of Urania, Louisiana Pellets operates a wood pellet manufacturing facility capable of producing approximately 450,000 metric tons per year. The facility filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the Western District of Louisiana in February 2016, and has recently idled production.
Drax Biomass has previously signaled its intent to pursue the acquisition of financially distressed pellet manufacturing assets. The purchase of such assets will support the company’s strategy of more than doubling our current production capacity to self-supply 20-30% of Drax Power Station’s demand while also competing for supply contracts in new biomass markets. Drax Biomass currently operates two pellet manufacturing facilities in Bastrop, Louisiana and Gloster, Mississippi, as well as a port storage and transit facility in Port Allen, Louisiana.
“We’re thrilled with the outcome of last week’s auction,” said Pete Madden, President and Chief Executive Officer of Drax Biomass. “Louisiana Pellets sits in the middle of a healthy and vibrant wood basket and is served by modern infrastructure, making it an ideal addition to our asset portfolio. We’re excited by the prospect of joining Urania’s business community, and we look forward to increasing our presence in Louisiana, which has been a key partner in our growth as a business.”
Last week’s auction results are contingent upon a court-approved sale of the assets, with the sale hearing currently scheduled for April 4, 2017. If approved, Drax Biomass intends to close on the sale by the end of April.
(1) Louisiana Pellets, Inc. and German Pellets Louisiana, LLC (collectively “Louisiana Pellets”) is the owner and developer of a wood pellet manufacturing facility located in Urania, Louisiana.
About Drax Biomass
Drax Biomass Inc. is a manufacturer of compressed wood pellets produced from sustainably managed working forests. Headquartered in Atlanta, GA with operations across the Southeastern U.S., we employ innovative manufacturing techniques to produce high quality pellets that can be shipped safely and efficiently around the world for use as a renewable, low-carbon fuel. Our pellets allow electric utilities to reduce their dependence on coal, lower carbon emissions and provide new sources of safe, reliable and affordable power. Led by an experienced team of operations professionals, Drax Biomass is committed to supporting the communities in which we operate by promoting sustainable forestry and investing in local economic development.
About Drax Group
Drax Group plc plays a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low carbon future. Drax operates the largest power station in the UK and supplies up to 8 percent of the country’s electricity needs. The energy firm converted from burning coal to become a predominantly biomass-fueled electricity generator. Drax is the biggest single site renewable generator in the UK and the largest decarbonization project in Europe. Its 2,300-strong staff operate across three principal areas of activity – electricity generation, electricity sales to business customers and compressed wood pellet production.