Green Plains to issue $200 million in new convertible notes

OMAHA - Green Plains Inc. (NASDAQ:GPRE), a biofuels company with annual revenues of $2.4 billion, announced it has entered into agreements to exchange $170 million of its existing 2.25% Convertible Senior Notes due 2027 for newly issued 5.25% Convertible Senior Notes due November 2030. According to InvestingPro data, the company operates with a significant debt burden, with total debt standing at $610 million as of the latest quarter.

The biofuels company will also issue an additional $30 million of the 2030 Notes for cash through separate subscription agreements, according to a press release statement.

In connection with these transactions, Green Plains plans to repurchase approximately 2.9 million shares of its common stock for about $30 million from certain participating holders. This share repurchase will be funded with proceeds from the subscription transactions.

The initial conversion rate for the new 2030 Notes is 63.6132 shares of common stock per $1,000 principal amount, equivalent to a conversion price of approximately $15.72 per share. This represents a conversion premium of approximately 50% to the company’s last reported share price on October 21.

Following the completion of these transactions, which are expected to close on Monday, October 27, Green Plains will have $200 million in aggregate principal amount of the 2030 Notes outstanding. Additionally, $60 million of the original 2027 Notes will remain outstanding with their existing terms unchanged.

The 2030 Notes and any shares of common stock issuable upon conversion have not been registered under the Securities Act of 1933 and may not be offered or sold in the U.S. absent registration or an applicable exemption.

Green Plains is a biorefining company that produces renewable fuels and sustainable ingredients, with plans to deploy carbon capture and storage solutions at three of its facilities this year. While the company has shown strong market performance with a 219% return over the past six months, InvestingPro subscribers have access to 12 additional key insights and a comprehensive Pro Research Report that provides deep analysis of the company’s financial health and growth prospects.

In other recent news, Green Plains Inc. has started carbon capture operations at its York, Nebraska facility, marking a significant step in its environmental initiatives. The system is now fully operational, delivering biogenic carbon dioxide for permanent sequestration. Additionally, Green Plains has completed the sale of its ethanol plant in Rives, Tennessee, to POET Biorefining for $190 million in cash, including an estimated $20 million in working capital.

The company also announced an agreement with Freepoint Commodities to sell 45Z Clean Fuel Production Credits, expected to generate a $40-50 million EBITDA boost in 2025. This agreement involves credits from low-CI ethanol production at Green Plains’ three Nebraska facilities. UBS noted that full-year credits will be included where operations allow. Furthermore, Green Plains has signed a term sheet with Freepoint to monetize tax credits from three additional facilities expected to qualify under 45Z during 2025. These developments highlight Green Plains’ strategic financial maneuvers and environmental commitments.

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