Green Plains (GPRE) will be able to pay off its mezzanine debt with the sale proceeds from its Obion plant, clearing its debt overhang, Oppenheimer said in a note Thursday.

"GPRE has removed the largest financial overhang on the stock by paying off its expensive mezzanine debt while adding a bit of

liquidity to the balance sheet," the report said.

Late Wednesday, the firm said it has struck a deal to sell the ethanol plant for $190 million, with closing expected in Q3.

"The strengthened balance sheet is also enabling GPRE to conclude its 18-month strategic review process," the report said.

The note also pointed to favorable macro conditions, including

extended 45Z tax credits, supportive biofuel policies and improved carbon monetization opportunities.

"While still subject to the whims of the biofuels market, we see GPRE's worst days behind it," it said. Oppenheimer upgraded the stock to outperform from perform with $14 price target.

Shares of the company were up about 10% in recent trading.

Price: 10.99, Change: +1.04, Percent Change: +10.45