Retirement System To Make $26M Loan To Arkansas Wood Pellet Company

The Arkansas Teacher Retirement System will make a short-term loan of up to $26 million to Highland LLC, which operates a wood pellet manufacturing plant in the Pine Bluff industrial park near White Hall, the system’s board of trustees has decided. In July 2016, the system’s trustees authorized an investment of up to $25 million […]

The Arkansas Teacher Retirement System will make a short-term loan of up to $26 million to Highland LLC, which operates a wood pellet manufacturing plant in the Pine Bluff industrial park near White Hall, the system’s board of trustees has decided.

In July 2016, the system’s trustees authorized an investment of up to $25 million for 31 percent equity ownership of Highland LLC, which operates the pellet plant that is still under construction. The plant has a 10-year agreement to supply the Drax Group with more than 600,000 tons of wood pellets a year, according to the system’s staff.

Highland is reviewing opportunities to refinance some of its existing debt as the facility nears completion and production increases, the system’s staff said in a written report to the trustees. The trustees voted Friday on the loan. The current debt to be refinanced is with Astec, which makes Highland’s wood pellet production equipment, the system’s staff reported.

“The Astec loan was intended only for construction financing and now construction is winding down,” according to the system staff report. “The Highland plant is in the final stages of being completed and all but one line of the manufacturing equipment are in production. Highland is expected to maintain its existing long-term financing until sometime in 2018.”

The refinancing of the shorter-term debt with Astec presents investment opportunities for the teacher retirement system, the staff report said. The proposed loan of up to $26 million would have a beginning interest rate of 9 percent for a term of about three years, the system’s staff said.

From Arkansas Online: http://www.arkansasonline.com/news/2017/sep/11/retirement-system-to-make-26m-loan-to-p/?f=news

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