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REX American Resources Subsidiary Agrees to Acquire 48% Interest in South Dakota Ethanol Plant

^{Published on 2010-07-01 11:10:32 - Market Wire}
 

DAYTON, Ohio & MARION, S.D.--([ BUSINESS WIRE ])--REX American Resources Corporation (NYSE:REX) announced today that it has, through a wholly-owned subsidiary, entered into a definitive agreement to acquire an approximate 48% equity ownership interest in NuGen Energy, LLC (aNuGena). REX has agreed to acquire its ownership interest for $9.2 million with a commitment of up to an additional $6.5 million based upon the future profitability of NuGen.

NuGen Energy, a subsidiary of Central Farmers Cooperative, operates a nameplate 100 million gallon ethanol plant in Marion, South Dakota. The plant was built by Fagen, Inc. and utilizes ICM, Inc. technology. Upon completion, the investment will increase REXa™s overall ownership interest of annual nameplate capacity ethanol production by approximately 33%. REX intends to fund its initial investment from cash on hand, and at April 30, 2010, REX had cash and cash equivalents of $101.4 million, including $86.1 million of cash at the parent company (exclusive of approximately $15.3 million of cash at consolidated ethanol production facilities).

The closing of the transaction, expected to occur by the end of July 2010, is subject to the satisfaction of customary conditions. Upon completing the NuGen investment, REX will have interests in seven ethanol production facilities representing REX ownership of approximately 191 million gallons per year of annual nameplate capacity. The total annual nameplate capacity of ethanol production facilities in which REX has ownership interests is approximately 632 million gallons per year. Further information about REX American Resources Corporation is available at [ www.rexamerican.com ].

This news announcement contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by use of forward-looking terminology such as amay,a aexpect,a abelieve,a aestimate,a aanticipatea or acontinuea or the negative thereof or other variations thereon or comparable terminology. Readers are cautioned that there are risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. These risks and uncertainties include the risk factors set forth from time to time in the Companya™s filings with the Securities and Exchange Commission and include among other things: the impact of legislative changes, the price volatility and availability of corn, sorghum, dried distiller grains, ethanol, gasoline and natural gas, ethanol plants operating efficiently and according to forecasts and projections, changes in the national or regional economies, weather, the effects of terrorism or acts of war, changes in real estate market conditions and the impact of Internal Revenue Service audits. The Company does not intend to update publicly any forward-looking statements except as required by law.