Heron Lake BioEnergy, LLC announced that it has received $12 million in funding from Agstar Financial Services, PCA, Project Viking, LLC, Schmitz Grain, Inc., and other investors.
September 18, 2013 at 12:00 am EDT
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Heron Lake BioEnergy, LLC announced private placement of 7.25% subordinated secured notes due 2018 for minimum gross proceeds of $5,000,000 and maximum gross proceeds of $12,000,000 on May 17, 2013. The notes will bear interest at 7.25% per annum and will be convertible into class A membership units of the company at a conversion price of $0.30 per unit. The securities will be issued pursuant to exemption provided under Regulation D.
On the same date, the company received $1,407,000 in the transaction. David J. & Krista R. Woestehoff invested $501,000, existing investor, Schmitz Grain, Inc. and Doug Schmitz invested $250,500 each, Michael Kunerth Trust and Dawn Kunerth Trust invested $126,000 each, Robert J. & Jean M. Ferguson invested $51,000, and Project Viking, L.L.C. invested $102,000 in the transaction. The notes will mature on October 1, 2018.
On July 31, 2013, the company announced that it has received $6,922,500 in second tranche closing. The company issued 8,075,000 class A membership units and 15,000,000 class B membership units at a price of $0.30 per unit to existing investor, Project Viking, LLC. As part of the transaction, the investor will appoint five members out of a total nine to the company's board of directors.
On August 2, 2013, the company announced that it will accept a maximum investment of $3,670,500 from Project Viking, L.L.C.
On September 18, 2013, Heron Lake BioEnergy, LLC closed the transaction. The company received $3,670,500 in the last tranche from existing investor, AgStar Financial Services, PCA. The company issued subordinated secured notes worth $2,838,000 and class A membership units worth $832,500 in the last tranche. The notes are subordinated secured obligations of the company, with interest payable on April 1 and October 1 of each year, beginning April 1, 2014, through the maturity date. The company may redeem all or any portion of the outstanding principal amount of the notes upon not less than 45 and not more than 60 days' prior notice at any time prior to October 1, 2018 without penalty or premium, at a redemption price equal to 100% of the principal amount of notes redeemed plus accrued and unpaid interest to the redemption date, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date, and provided that any redemption of less than the entire outstanding principal amount of the notes must be done pro rata to all notes. The notes are convertible into units prior to the close of business on any business day during the 30-day period immediately preceding October 1, 2014, October 1, 2015, October 1, 2016, October 1, 2017 or October 21, 2018, and prior to the close of business on any business day during the 30-day period immediately preceding 10 days prior to the effective time of the conversion. Michael L. Weaver of Lindquist & Vennum LLP acted as legal advisor to the company. Phillip L. Kunkel of Gray Plant Mooty acted as legal advisor to AgStar Financial Services, PCA.
Heron Lake BioEnergy, LLC owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 72.3 million gallons per year of undenatured ethanol on a twelve-month rolling sum basis. In addition, Heron Lake BioEnergy, LLC produces and sells distillersâ grains with solubles and corn oil as co-products of ethanol production. The Companyâs segments include Ethanol Production and Natural Gas Pipeline. Heron Lake BioEnergy, LLCâs wholly owned subsidiary, HLBE Pipeline Company, LLC (HLBE Pipeline Company), is the sole owner of Agrinatural Gas, LLC (Agrinatural). Agrinatural, is a natural gas pipeline company that owns and operates the natural gas pipeline that provides natural gas to the Companyâs ethanol production facility and other customers through a connection with the natural gas pipeline facilities of Northern Border Pipeline Company in Cottonwood County, Minnesota.
Heron Lake BioEnergy, LLC announced that it has received $12 million in funding from Agstar Financial Services, PCA, Project Viking, LLC, Schmitz Grain, Inc., and other investors.
HERON LAKE BIOENERGY, LLC 
