Myriant Receives $25 Million Award Under USDA's Business and Industry (B&I) Loan Guarantee Program to Develop Bio-based Chemicals
Myriant Corporation announced today it closed a $25 million private bond placement for the construction of its flagship commercial bio-succinic acid plant located in Lake Providence, Louisiana. The placement utilized the Business and Industry ("B&I") Rural Development Loan Guarantee program that is administered by the United States Department of Agriculture (USDA). Myriant's commercial plant will produce 30 million pounds of bio-succinic acid annually and construction is on-schedule for the planned commercial start-up in the first quarter of 2013. Myriant has signed multi-year, customer contracts for the plant's expected annual production capacity and is currently planning its 140 million pound expansion in the United States.
Myriant is the first bio-based chemicals company to receive funding from USDA's B&I Rural Development Loan Guarantee program. The B&I program is designed to improve the economic and environmental climate in rural communities by supporting the development of high quality local industry. Myriant's Lake Providence commercial plant is expected to create approximately 40-50 direct and highly-skilled jobs, approximately 250 construction jobs and an estimated 300 indirect jobs. The project will be the first and only bio-succinic acid plant in the United States and its construction will help revitalize the U.S. manufacturing base, bringing much needed job growth to Northeast Louisiana.
"It is a tremendous accomplishment for Myriant to be the first renewable chemicals company to complete a project financing under the USDA's B&I program and we're delighted to partner with them to demonstrate the power of partnerships between the public and private sector," commented Stephen J. Gatto, Chairman and Chief Executive Officer for Myriant. "Rigorous analysis has shown, and our direct experience is proving, that U.S. based manufacturers of renewable chemicals derived from natural sources can be the world's lowest cost producers of these products. This means that the chemicals manufacturing sector in the U.S., which has seen a trade surplus of $13.4 billion in 1998 shrink to a loss of $2.7 billion by 2008 and a loss of 130,000 jobs to outsourcing, can be revived and accelerated in new renewable, eco-friendly ways for a return to world-leading growth in innovation and the associated prosperity it can deliver here in the United States."
Mr. Gatto continued, "At a time when job creation, manufacturing expansion, and infrastructure investment are seen as essential elements of the American economic recovery, innovation wrought by the combination of biotechnology, agriculture and manufacturing in America, by Americans, holds great promise for extraordinary growth and a revitalized global technology leadership."
"America's growing domestic bio-based industry is a vital part of the Obama Administration's all-of-the-above energy strategy to create jobs and protect our environment by reducing our dependence on petroleum-based products," said John Padalino, Acting Administrator for Rural Business Services. "I am delighted that USDA was able to work with Myriant to help make this opportunity possible."
The $25 million USDA B&I Loan Guarantee complements a $50 million cooperative agreement that Myriant received from the United States Department of Energy (DOE) and a $10 million grant from the Lake Providence Port Commission and the Louisiana Department of Transportation. Of the $25 million in bonds sold, $15 million are guaranteed by the USDA under the B&I program. Sales of the unsecured portion of the bonds indicate investor confidence in the future financial performance of Myriant's Lake Providence bio-refinery. Stern Brothers acted as the bond placement agent. HEARTLAND Bank, Little Rock, Arkansas, is the Lender of Record through the B&I Loan Program and will service the bonds.
Brent Erickson, Executive Vice President of the Biotechnology Industry Organization, said, "On behalf of the Biotechnology Industry Organization, I congratulate Myriant and thank the USDA for its ongoing support, which has been critical to unlocking private capital for innovative bio-refineries. Myriant is at the forefront of a growing renewable chemical sector and the first in that sector to receive a USDA loan guarantee. Their success illustrates the potential for opening rural development and renewable energy programs to this sector."