UK power major Drax Group has announced that it is participating in separate US “Chapter 11” bankruptcy auction processes for the acquisition of the operating assets of both German Pellets subsidiaries, Texas Pellets in Woodville, Texas and Louisiana Pellets, Urania, Louisiana.
According to a statement, Drax has submitted initial cash bids for these assets as part of an auction process, which will be held on 1 and 2 March 2017. Whilst these are binding bids, and could be accepted by the sellers, it is expected that the successful buyer will be determined through auctions.
The company already owns and operates two 450 000 per annum capacity pellet plants in the US through its subsidiary Drax Biomass. Drax has previously indicated its intention to expand its self-supply wood pellet operations “to support 20-30 percent” of its generation requirement. Subject to a disciplined approach to pricing in the auctions, the acquisition of these assets would help Drax meet this target raising it self-supply capacity to ≈ 2 million tonnes per annum.
