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Published January 11, 2011, 04:04 PM

Construction starts soon on Minnesota canola plant

HALLOCK, Minn. — Construction will start Jan. 11 on a $160 million canola oil processing plant in Hallock, Minn., and is set to be complete in the fourth quarter of 2012.

By: Mikkel Pates, Agweek

HALLOCK, Minn. — Construction will start Jan. 11 on a $160 million canola oil processing plant in Hallock, Minn., and is set to be complete in the fourth quarter of 2012. Owners say they’ve secured final financing and announced the construction schedule.

PICO Holdings Inc. says it had secured $100 million in a nonrecourse, senior-secured construction loan and had completed acquisition of Northstar Agri Industries — an agreement PICO Holdings had said was in the works Sept. 21.

Northstar Agri Industries will operate the processing plant and integrated refinery. PICO Holdings has contributed $60 million in equity for an 88 percent ownership. PICO Holdings says that ING Capital L.L.C. will serve as administrative agent and will be 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 the credit facility in spring 2011. Guaranteed maximum price contracts for construction, engineering and technology have been executed with Karges-Faulconbridge Inc., McGough Industrial Construction L.L.C., and Crown Iron Works.

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