Canada’s Biox plans IPO to fund biodiesel plants

12 July 2007 17:13  [Source: ICIS news]

TORONTO (ICIS news)--Canadian biodiesel maker Biox is planning an initial public offering (IPO) to raise finance for four projects, a top company executive said on Thursday.

 

Chief financial officer Christopher Clinning confirmed the plans but declined to disclose details, citing a legal “quiet period” prior to the IPO.

 

In a regulatory filing, Biox said it was planning biodiesel projects in Canada and the US, each project with a capacity of 67m litres/year.

 

The plants would be located in Hamilton and Montreal in Canada and in Philadelphia, Pennsylvania and Houston, Texas, with planned start-ups in 2009-2010.

 

The projects would employ an innovative continuous production process that allowed the use of lower-cost feedstocks than conventional batch production processes, Biox said.

 

The company has an existing 67m litre/year facility in Hamilton, near Toronto.

 

Biodiesel use in North America would show strong growth in coming years due to government-imposed renewable fuel standards, Biox said, pointing to Canada’s 2% blending mandate for diesel fuels from 2012.

 

But Biox, in pointing out some of the IPOs risks, also said that excess supply in North America was a possibility. 

 

As of June 2007, the US alone had 148 operating biodiesel plants with 5.3bn litres/year of capacity, the company said, citing the latest industry data. There were 101 projects under construction or expansion, adding another 7.2bn litres/year of capacity, Biox said.

 

According to Canadian analysts, Biox’s IPO could yield up to Canadian dollars (C$) 150m ($143m).

 

Canada has a number biofuels companies but so far only two are publicly traded: Vancouver-based Lignol Energy; and SunOpta, an Ontario-based food and grain company that also makes biofuels.

 

($1 = C$1.05)

 

By: Stefan Baumgarten
+1 713 525 2653

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