Ethanex buying Nebraska ethanol plant from Midwest Renewable

Basehor, Kan.-based Ethanex Energy (OTC: EHNX) said today it signed a letter of intent to acquire a 26 million gallon per year ethanol plant in Nebraska from Midwest Renewable Energy for $220 million in cash and stock.

Ethanex said the plant is undergoing a two phase expansion to produce 111 million gallons per year. The first phase would add 42.5 million gallons in the third quarter of 2008, with the second phase adding another 42.5 million gallons in the first quarter of 2009.

"This acquisition will transform our company. It will provide Ethanex with immediate production and revenue at a cost that we believe is below that of building a new facility," said Al Knapp, president and CEO of Ethanex.

Ethanex, a development stage company, said it would pay $170 million in cash for the Nebraska plant and $50 million in Ethanex common stock.

"This facility will also serve as a showcase to demonstrate our fractionation platform. We expect that sales of integrated fractionation systems to third parties will become an additional avenue for our company's growth in the future," said Knapp.

Ethanex, which developed the fractionation system in collaboration with Uzwil, Switzerland's Buhler Group, said it plans to add the fractionation platform to the Nebraska plant in order to increase efficiency and profitability.

The company said it expects the fractionation mill to become operational in conjunction with the startup of the first phase of the plant's expansion.