Drax Group completes $35m acquisition of Louisiana Pellets

Electrical power generation company Drax Group has completed the acquisition of Louisiana Pellets for $35.4m, following a court hearing to approve the result of an auction.

The FTSE 250 company had participated in a bankruptcy auction on 30 March for the acquisition of both Louisiana Pellets and Texas Pellets.

It was successful in its bid for Louisiana Pellets, but the auction of Texas Pellets was postponed.

Louisiana Pellets is expected to provide additional biomass pellet capacity of 450,000 tonnes per year, as part of Drax's strategy to build a flexible supply chain capable of self-supplying 30% of production.

Its plant is expected to return to service by early 2018 following an upgrade.

Drax chief executive Dorothy Thompson said: "Louisiana Pellets marks another positive step in delivering the Drax Group strategy. The deal forms part of our plan to significantly increase our capability to manufacture high quality compressed wood pellets and increase self-supply to Drax Power Station.

"Upgrading half the Power Station to use sustainable wood pellets has resulted in Drax producing 16% of the UK's renewable electricity and with the right conditions we aim to do more."

Shares in Drax Group were flat at 304.50p at 1236 BST.