Portfolio Company Press Release
|American Capital Has Committed to Invest $85 Million In The Project Financing of Three Ethanol Facilities|
Bethesda, MD - February 7, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has committed to invest $85 million in ASAlliances Biofuels LLC, an entity developed by Americas Strategic Alliances LLC to construct three large-scale ethanol production facilities. American Capital's investment will take the form of senior subordinated debt and preferred equity. Laminar Direct Capital L.P., a member of the D. E. Shaw group, and US Renewables Group LLC will also be providing senior subordinated debt and equity. Fagen Inc. and Cargill Biofuels Investments LLC will also invest in the equity. A syndicate led by WestLB will be providing senior secured financing to the new Company. Post close, American Capital owns approximately 41% of ASAlliances Biofuels, on a fully diluted basis.
"We are pleased to announce our Energy Group's investment in ASAlliances Biofuels. This investment is American Capital's tenth energy related investment over the past eight and a half years," said American Capital Regional Managing Director Darin Winn. "This was an exciting opportunity for the Energy Group to lead the project financing of three ethanol production plants in the rapidly growing ethanol market. We are looking forward to growing the group as more opportunities arise in all segments of the energy industry."
American Capital invested approximately $3.2 billion in 2005, approximately $1 billion in the fourth quarter 2005 and $123 million year to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital.
"When construction is completed, ASAlliances Biofuels' plants are anticipated to be among the most competitive ethanol production facilities in the U.S. and the Company is expected to be one of the largest U.S. producers of ethanol in this highly fragmented industry," said American Capital Principal Kevin Kuykendall. "The ethanol market is growing rapidly. The passage of the Energy Policy Act of 2005, which mandates a schedule for blending renewable fuels into gasoline, coupled with the need for environmentally beneficial fuels and 'clean' octane sources, has accelerated the industry's momentum. The support of Cargill, Fagen and United BioEnergy, all strong project participants with extensive experience in the ethanol industry, will result in low construction and technology risks for the Company. In addition, with favorable legislation and strategically located plants with proximity to low-cost corn supply, premium-priced, large-volume ethanol markets on the east and west coasts and railroad transportation, ASAlliances Biofuels will be well positioned for the anticipated increases in ethanol demand in the coming years."
ASAlliances Biofuels' three ethanol facilities will each produce 100 million gallons of fuel-grade ethanol per year and will be located in Albion, Nebraska, Linden, Indiana, and Bloomingburg, Ohio. Each plant will be designed and constructed by Fagen, the recognized leader and premier design-builder in the ethanol industry. Cargill, one of the leading corn and grain suppliers in the U.S., will provide corn and natural gas procurement services for each plant, as well as marketing and transportation services. The three facilities will be located adjacent to existing Cargill grain elevators. United BioEnergy, the leading operator of ethanol facilities in the U.S., will provide operation and maintenance management services for each plant. Ethanol is produced from corn or other starch feedstock by milling, fermentation, distillation and dehydration and is used almost exclusively as a gasoline additive and provides a number of valuable benefits as a clean burning gasoline additive. The ethanol produced by ASAlliances Biofuels' plants will ultimately be sold to crude oil refiners and gasoline blenders as either an oxygenate or fuel extender.
ABOUT AMERICAN CAPITAL
American Capital Energy Group
As of January 31, 2006, American Capital shareholders have enjoyed a total return of 403% since the Company's IPO -an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $961 million in dividends and paid $19.11 dividends per share since its August 1997 IPO at $15 per share.
Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit our website.
ABOUT AMERICAS STRATEGIC ALLIANCES LLC
ABOUT LAMINAR DIRECT CAPITAL L.P.
ABOUT U.S. RENEWABLES GROUP LLC
Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.
This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
This announcement is neither an offer to sell nor a solicitation to buy securities.
SOURCE: American Capital Ltd.www.americancapital.com
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