Gevo (GEVO) said Wednesday it reached an agreement to sell its Agri-Energy unit to A.E. Innovation for $7 million.

The company said the deal includes the unit's ethanol facility located in Luverne, Minnesota and part of the surrounding land.

Gevo said it will receive $2 million at closing and an additional $5 million later under the purchase agreement. The sale, which is slated to close by year-end, provides Gevo with $3 million of annual savings in current idling costs for the facility, the company said.

Gevo also said it will retain equipment and land tied to isobutanol production, which could support future output of up to 1 million gallons annually.

A.E. Innovation, a Minnesota-based agricultural group, plans to restart ethanol operations at the plant, which has been idle since 2022, and use the site for technology development, according to Gevo.

Shares of the company were down 1.3% in recent Wednesday trading.

Price: 1.13, Change: -0.01, Percent Change: -1.32