Cargill, Inc., and ProGold, Wahpeton, N.D., have reached a new lease agreement. The new agreement will be effective as of Jan. 1, 2018. The prior lease remains in effect until then.
The lease is five years, with an optional sixth year.
Base rent for the lease is as follows:
- 2018-9 – $17,000,000
- 2020 – $16,000,000
- 2021-2 – $15,500,000
- 2023 – $14,000,000 (optional 6th year)
ProGold agreed to fund a minimum of $750,000 for infrastructure maintenance each year of the lease in order to maintain the condition of the plant.
ProGold may also be required to pay additional sums in order to make certain capital improvements in a manner similar to how the cooling tower replacement occurred in 2015.
The agreement includes an option for Cargill to purchase 50% interest in ProGold from American Crystal Sugar Company (ACSC). If Cargill exercises the option, GGC would purchase ACSC’s remaining 1%, to become a 50% owner of ProGold. GGC and Cargill have agreed to a general framework for a future partnership, with a detailed partnership agreement to be completed prior to Cargill exercising its option.
“The evolution of the corn wet milling industry was an important aspect of our discussions,” stated GGC Chairman Mark Harless. “We believe this lease is a reasonable bargain for the near term. It also holds out a possibility of a long term future for the ProGold plant.”
Source: Golden Growers Cooperative