Investment closing delayed
Investors in the planned North Dakota Soybean Processors plant at Spiritwood are being required to confirm their intent to stay with the project after a change in the escrow closing date, according to Scott Austin, CEO of the company.
"Originally, our perspective said March 31 (as a closing date)," he said. "Since we're not ready to close escrow, we decided to move it forward to the end of the year."
Investors received a mailing from Soybean Processors in March. They are required to return the signed form acknowledging the change in closing date by April 27 or their investment will be returned to them.
"We'll lose a couple here and there," Austin said, referring to investors. "We don't anticipate any of the larger investors will withdraw."
The project is seeking $60 million of equity investment toward the estimated $280 million project, which was originally announced in February 2017.
Austin said negotiations are still proceeding with a company that would purchase the soyoil produced at the planned plant. Finalization of that agreement could occur this summer and would trigger an announcement concerning construction plans.
Connie Ova, CEO of the Jamestown/Stutsman Development Corp., said the delay in the escrow closing date was expected.
"I think the project will be better for it," she said.
Austin said the project still looks attractive because the soyoil and soymeal that would be produced at the planned Spiritwood facility are not exported to China. He also believes vendors of equipment and steel for the plant won't be greatly affected by tariffs.
Increases in costs of steel or equipment could raise the construction cost of the project.
"Most will hold to the original prices," he said.
Austin said he anticipates the final agreements with strategic partners will come well before the new Dec. 31 escrow closing date.
"The project looks more promising now than ever," he said.