Chairman Mark Harless explained details of the new ProGold lease to Cargill. In particular, he focused on Cargill’s ‘option’ to purchase 50% of ProGold. “Golden Growers signed an agreement consenting to the sale, pending a partnership agreement between Golden Growers and Cargill. Golden Growers has also secured the right to purchase 1% of ProGold from American Crystal Sugar if the option is exercised. The combination of actions would result in Golden Growers and Cargill becoming 50/50 owners of the Wahpeton corn wet milling plant.”
Harless went on to relay how this provision has resulted in more questions than any other part of the lease. He then highlighted three most common questions.
“First, there is no guarantee that Cargill will exercise their option. Cargill will likely make their decision based on market conditions and potential opportunities at the time.
We do not presume to know those conditions or the timing of any decision.”
“Second, to accommodate this option, Golden Growers and Cargill must agree on terms of partnership. We have agreed on general principles, but we will still need to, expeditiously and in good faith, finalize a partnership agreement in advance if Cargill informs us of their intention to exercise their option.”
“And third, details of any agreement between Cargill and American Crystal Sugar, including a purchase price, are confidential between those parties.”
Harless explained that the Board would be reviewing how to best achieve a fair and profitable partnership agreement and exploring financing options for various scenarios if Cargill exercises their option. “We look forward to engaging our members in those discussions.”