Drax Biomass wins auction for bankrupt high capacity wood pellet company
Wood pellet manufacturing company Drax Biomass has won the bidding battle for the acquisition of the bankrupt Louisiana Pellets.
Drax Biomass operates two huge white pellet storage domes at the Port of Greater Baton Rouge, as well as two other pellet production facilities in the area.
Urania based Louisiana Pellets filed for bankruptcy in early 2016, and recently brought production to a stop. The bankruptcy triggered a bidding war, culminating with an auction on 30 March.
By acquiring Louisiana Pellets and its facilities, Drax Biomass will be able to more than double its pellet production. Prior to bankruptcy, Louisiana Pellets had a production capacity of more than 450,000 metric tons per year.
An official from Drax Biomass told the Greater Baton Rouge Business Report that the deal will likely bring new business through the port.
“We plan to bring the Urania volume through Port Allen,” Drax Biomass spokesman David Malkin told Greater Baton Rouge Business Report. “That will result in additional rents for the port.”
Providing a court approval for the sale of the assets at auction is obtained, Drax Biomass expects to close the purchase of Louisiana Pellets by the end of the month. Financial details of the deal have not been disclosed.
The pellets Drax Biomass manufactures, then stores and ships from its Port Allen facility, are used for power generation in the UK.