March 18, 2009 / 2:30 AM / 10 years ago

UPDATE 4-Valero wins VeraSun ethanol facilities in auction

* Valero bids $477 mln plus for facilities and silo

* Other bidders win other VeraSun assets for $516 mln

* ADM bid, but did not acquire any VeraSun assets (Updates after VeraSun statement, adds details on facilities, other bidders)

By Emily Chasan and Michael Erman

NEW YORK, March 17 (Reuters) - U.S. refiner Valero Energy Corp (VLO.N) has won an auction for seven facilities, bidding about $477 million for ethanol production facilities and a development site of bankrupt ethanol maker VeraSun Energy Corp VSUNQ.OB.

In addition, secured lenders for the remaining facilities submitted successful combined credit bids of $516 million, VeraSun said in a statement. The largest was a credit bid of $324 million submitted by a group of lenders led by AgStar Financial Services, VeraSun said.

VeraSun will seek approval of the successful bids at a sale hearing conducted by the U.S. Bankruptcy Court on March 18 and expects the sales to close in April.

Valero won facilities in Aurora, South Dakota; Albert City, Charles City, Fort Dodge and Harley, Iowa; Welcome, Minnesota; Reynolds, Indiana and Albion, Nebraska.

VeraSun auctioned off its assets during a two-day auction that began on Monday, a source familiar with the process said on Tuesday.

VeraSun has previously said it sought to sell all of its ethanol plants and operations in separate or combined deals at the auction.

Archer Daniels Midland Co (ADM.N) made a competing bid for some of VeraSun’s assets at the auction, according to people familiar with the matter, but did not acquire any.

The sources asked for anonymity because the auction process is not public.

ADM said in a statement on Tuesday that it “participated in the process, but did not acquire any assets” of VeraSun.

Valero had been the “stalking horse” bidder at the auction, and was entitled to make the lead bid. In February, Valero said it would bid $280 million for five of VeraSun’s production facilities, subject to the bankruptcy court auction process.

Valero declined to comment on the auction.

VeraSun was the biggest U.S. publicly traded ethanol maker when it filed for bankruptcy protection in October. The company faced a cash crunch after locking in costly contracts for corn, the main ingredient for ethanol in the United States.

Investment bank Rothschild acted as investment banker for VeraSun. VeraSun is being represented in bankruptcy by lawyers at Skadden Arps Slate Meagher & Flom. Its official committee of unsecured creditors is being represented by Akin Gump Strauss Hauer & Feld, and its debtor-in-posession lenders are represented by Cadwalader Wickersham & Taft.

The case is In re: VeraSun Energy Corp, U.S. Bankruptcy Court, District of Delaware, No. 08-12606. (Additional reporting by Karl Plume in Chicago and Helen Chernikoff in New York; Editing by Tim Dobbyn, Gary Hill)

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