Ceres Global Ag to Sell Savage, MN Grain Storage Facility to CGB
Date Posted: April 1, 2014
Toronto—Ceres Global Ag Corp. ("Ceres" or the "Company") (TSX: CRP) March 31 announced that its 100% owned subsidiary, Riverland Ag Corp. ("Riverland"), has entered into an agreement to sell its Savage, Minnesota grain storage facility to Consolidated Grain and Barge Co. ("CGB").
Consolidated Grain and Barge Co. is a wholly owned subsidiary of CGB Enterprises, Inc., headquartered in Mandeville, Louisiana.
The transaction is expected to close by the end of June, 2014 and is subject to satisfaction of certain conditions and relevant regulatory approvals.
"This sale is another milestone in our plan to transform Riverland's operations and fund the construction of the Northgate commodity logistics centre, and it builds on the recent announcement to sell our Manitowoc, Wisconsin facility," said Michael Detlefsen, President and CEO of Ceres.
"Our focus is to optimize the capacity utilization for the remaining Riverland facilities, continue to develop our active grain trading and merchandising capabilities, and to build a high-throughput grain elevator at Northgate."
Gross proceeds from the sale of the Savage facility will be $17.8 million.
Under the terms of the sale, Ceres, through Riverland, will lease back from CGB 3.5 million bushels of storage capacity at Savage for a six-year term.
"The capacity Riverland has agreed to lease back at Savage will ensure that we retain a presence in the spring wheat and oat delivery markets, which are crucial markets in the region," said Craig Reiners, President & CEO of Riverland Ag.
"CGB is excited about entering the Savage market and serving new customers in that area. We also plan to expand our Fertilizer, Diversified Services, and other divisions in that market as well," said Steve Burbrink, Director of Business Development at CGB.
For more information, call 416-572-7631.