Northstar concurrently executed definitive agreements with PICO Holdings Inc. to provide $60 million in equity for an 88% ownership interest in Northstar Agri Industries. PICO Holdings Inc. previously announced this transaction in its press release on Sept. 21.
Northstar Agri Industries is an agribusiness concern that will build and operate a canola processing plant with an integrated refinery near Hallock, Minnesota, U.S. The plant is expected to be operational by the fourth quarter of 2012.
The total cost of the canola processing plant and integrated refinery is estimated to be $160 million. ING Capital LLC will serve as the administrative agent and lead arranger for the $100 million credit facility.
The credit facility is underwritten and includes a $10.5 million working capital facility. PICO expects to close on the credit facility in Spring 2011.
Guaranteed Maximum Price construction, engineering and technology contracts have been executed with Karges-Faulconbridge Inc., McGough Industrial Construction LLC and Crown Iron Works. Each of these firms has significant prior experience in the industry. Construction is scheduled to begin on Jan. 10, 2011. A ground breaking ceremony will be held at the plant site at on Jan. 11.
During construction, the project will create over 200 jobs for skilled craftsmen. When complete the plant will provide 47 full time jobs in Kittson county with a total payroll exceeding $3.5 million and significant related economic activity in the region.