Ethanol producer Green Plains Renewable Energy has signed an asset purchase agreement with Otter Tail Ag Enterprises to acquire an ethanol plant near Fergus Falls in Minnesota, US.

The dry-mill ethanol plant has a producing capacity of about 55 million gallon per year.

The transaction is anticipated to progress after receiving a court approval on the bankruptcy proceedings initiated by Otter Tail Ag Enterprises.

Green Plains said that an asset auction will be held in the next 60 days and there can be no assurances that its bid will be the winning bid among qualifying bids.

If completed, the acquisition is expected to increase Green Plains’ ethanol production capacity by approximately 8% to an annual capacity of 712 million gallons.

Green Plains plans to finance the transaction through a mix of available cash on hand and debt financing from existing lenders.