MGP Ingredients (MGPI) and SEACOR (CKH) Subsidiary Announce Reopening of Illinois Distillery
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MGP Ingredients, Inc. (NASDAQ: MGPI) today announced it has entered into a joint venture agreement with SEACOR Energy, Inc.'s affiliate, Illinois Corn Processing Holdings, Inc., to reactivate distillery operations at MGPI's facility in Pekin, Illinois. The facility will be owned and operated by a separate entity called Illinois Corn Processing, LLC and initially will be dedicated to the production of alcohol for beverage, industrial and fuel applications. Production is expected to begin in the near future.
Beverage and food grade industrial alcohol produced by the joint venture enterprise will be marketed by MGPI. The facility's fuel grade alcohol, or ethanol as it is commonly known, will be marketed by SEACOR Energy, a subsidiary of SEACOR Holdings, Inc. (NYSE: CKH), Fort Lauderdale, Fla.
SEACOR Energy paid MGPI $15 million for a 50 percent ownership interest in Illinois Corn Processing, LLC. Additional capitalization will be provided to the joint venture by an affiliate of SEACOR Energy through a term loan and revolving loan secured by the facility. MGPI and SEACOR Energy have agreed to a profit sharing arrangement related to the manufacturing, marketing and sales of the various alcohol products. MGPI will recognize charges of approximately $2.3 million in the second quarter of the company's current fiscal year related to the formation of the joint venture.
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