REX American (REX) Boosts Ownership in NuGen to 98%
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REX American Resources Corporation (NYSE: REX) announced today that through a wholly-owned subsidiary it has acquired an additional approximate 50% equity ownership interest in NuGen Energy, LLC, ("NuGen") raising its equity ownership in the entity to approximately 98%. Local farmers own the remaining approximate 2% interest.
REX acquired its additional interest in NuGen and paid in full its remaining contingent consideration liability (related to the June 2010 purchase of its initial 48% ownership interest in NuGen) for a total of $12.7 million and made a $7.0 million capital contribution to NuGen to reduce long-term debt. Effective November 1, 2011, REX will consolidate the plant’s results in its financial statements. In the twelve month period ended July 31, 2011, REX recognized pre-tax earnings of $9.3 million and received dividends of $3.1 million related to its then 48% equity ownership interest in NuGen. This acquisition increases REX's ownership of annual operating nameplate production capacity by approximately 30% from approximately 169 million gallons to approximately 219 million gallons.
REX acquired its additional interest in NuGen and paid in full its remaining contingent consideration liability (related to the June 2010 purchase of its initial 48% ownership interest in NuGen) for a total of $12.7 million and made a $7.0 million capital contribution to NuGen to reduce long-term debt. Effective November 1, 2011, REX will consolidate the plant’s results in its financial statements. In the twelve month period ended July 31, 2011, REX recognized pre-tax earnings of $9.3 million and received dividends of $3.1 million related to its then 48% equity ownership interest in NuGen. This acquisition increases REX's ownership of annual operating nameplate production capacity by approximately 30% from approximately 169 million gallons to approximately 219 million gallons.
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