MGP Ingredients, Inc. (NASDAQ:MGPI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On July 3, 2017, MGP Ingredients, Inc. ("MGP" or "Company") completed the previously-announced sale of its thirty percent equity ownership interest in Illinois Corn Processing, LLC ("ICP") to Pacific Ethanol Central, LLC ("Pacific Ethanol").

As previously disclosed, at the closing of the sale, MGP received cash of $9.0 million (before transaction expenses and taxes) and a secured promissory note ("Note") with a principal amount of $14.0 million (includes MGP's portion of a favorable working capital adjustment). ICP is the obligor on the Note. The Note is secured by, among other things, all of the limited liability company interests issued by ICP, as well as all of the property and assets of ICP following the closing. The Note bears interest at LIBOR plus an applicable margin. The margin is 5% for the first three months the Note is outstanding, 8% for the next three months, and 10% at all times thereafter. The Note matures 18 months from the closing of the merger transaction. The Note may be prepaid without penalty or premium. The Note requires mandatory prepayment in certain circumstances as a result of the receipt of cash proceeds by the maker from the sale or other disposition of the property which is collateral under the Note. The Note includes customary representations and warranties and events of default.

The Merger Agreement also contemplated a special distribution of all of ICP’s cash and cash equivalents to equity owners prior to closing. On June 28, 2017, MGP received $6.6 million (representing MGP’s 30% share of the $22.0 million dividend approved on June 26, 2017). MGP also received a smaller distribution of $0.8 million on June 30, 2017 (representing MGP’s 30% share of a $2.7 million additional distribution).

The above description of the Note is qualified in its entirety by the terms of the Note attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

MGP INGREDIENTS INC Exhibit
EX-10.1 2 icp-promissorynotemgp4845x.htm EX 10.1 – MGP – PROMISSORY NOTE (ICP) Exhibit EXECUTION VERSIONSECURED PROMISSORY NOTE$14,…
To view the full exhibit click here

About MGP Ingredients, Inc. (NASDAQ:MGPI)

MGP Ingredients, Inc. is a holding company. The Company’s principal operating subsidiaries are MGPI Processing, Inc. and MGPI of Indiana, LLC (MGPI-I). The Company produces and supplies distilled spirits, and wheat proteins and starches. The Company’s distilled spirits include bourbon and rye whiskeys, and grain neutral spirits, including vodka and gin. The Company also produces industrial alcohol for use in both food and non-food applications. Its distillery products are derived from corn and other grains, including rye, barley, wheat, barley malt and milo. The Company operates through two segments: distillery products and ingredient solutions. Its distillery products segment consists of food grade alcohol and co-products of its distillery operations, including distillers feed, fuel grade alcohol and corn oil. Its ingredient solutions segment consists of specialty wheat starches, specialty wheat proteins, commodity wheat starch and commodity wheat protein or vital wheat gluten.