December 8, 2011 at 10:28 pm #2026
Company takes over McPherson refinery
By Tom Webb – MCT Regional News 12/07/11
CHS Inc.’s biggest and most profitable holding is about to get even bigger.
The farm-and-energy cooperative said Thursday it will pay $350 million to buy out the two minority owners of a Kansas-based oil refinery. The deal would make Inver Grove Heights, Minn.-based CHS the refinery’s sole owner by 2015.
CHS currently owns roughly 75 percent of the National Cooperative Refinery Association, which is based in McPherson. Minority partner Growmark now owns about 18 percent, and MFA Oil about 7 percent.“As the nation’s leading cooperative energy company, becoming the sole owner of NCRA is an important part of adding value for our members,” said Jay Debertin, CHS executive vice president. The cooperative boasts that it is “the leading energy supplier to rural America.”
CHS is coming off the most profitable year in its history, thanks to good times in both its energy and agriculture businesses. Its 2011 profits reached nearly $1 billion, with record revenue of nearly $37 billion.
Unlike the structure of publicly held companies, CHS is owned by its farmer-members. It ranks as the largest cooperative in the country.
In addition to its agricultural interests, CHS has a broad energy portfolio, with holdings in refining, propane, lubricants, ethanol marketing and its own line of Cenex convenience stores. Last year, nearly two-thirds of CHS’s profits came from the energy side of the business.
In oil refining, its Kansas operation can refine 85,000 barrels of crude oil a day. CHS already is full owner of a second refinery, in Montana, that can refine 55,000 barrels a day.The announced agreement would require annual payments over four years, starting Sept. 1, based on its Securities and Exchange Commission filing. The deal also includes a contingency for additional payments, if the price of oil rises above a certain level.
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