Gevo files for $150m IPO

After the buzz on PetroAlgae’s IPO filing plans last week Wednesday, biobutanol producer Gevo announced on Thursday its own IPO filing. Renewable companies are probably holding their breath and praying for their success so more can follow through…

Gevo has been in the news lately regarding the near commercialization of their bio-butanol product with the acquisition of an ethanol facility in Minnesota. Capital costs expected to incur in the retrofitting of the ethanol plant is $17 million to produce 18m gal/year of isobutanol.

Gevo also recently hooked up with German specialty chemicals company Lanxess on the development and production of bio-based isobutene for rubbermaking.  Gevo anticipates initial commercial production of their isobutanol in the first half of 2012, and aside from Lanxess, the company is currently negotiating the final terms of several definitive agreements with customers and partners such as Total Petrochemicals, Toray Industries, United Airlines and CDTech (a hydrocarbon technology provider).

In Gevo’s S-1 IPO registration with the US Securities and Exchange Commission (SEC), the company stated that its strategy is to retrofit existing ethanol production facilities to produce isobutanol in order to project substantially lower capital outlays and a faster commercial deployment schedule compared to construction of new plants. After the Minnesota facility, Gevo plans to expand production capacity to produce and sell over 500 million gallons of isobutanol in 2014.

The company plans to list its shares in the NASDAQ stock exchange hoping to raise up to $150m. Gevo reported 2009 revenue at $660,000 but net loss for 2009 was$19.9m. No revenues were yet generated from isobutanol sales. Most of their revenues, according to Gevo, came from government grants and cooperative agreements. Near-term revenues will come from ethanol production until the Minnesota facility will start producing isobutanol.

Gevo expects products derived from isobutanol have potential applications in approximately 40% of the global petrochemicals market, representing a potential isobutanol market of 67 billion gal/year, and substantially all of the global hydrocarbon fuels market, representing a potential of 900bn gal/year. Specialty chemicals market for isobutanol is estimatd at 1.1bn gal/year while potential fuel blendstock market is at 40bn gal/year. Total potential market application for isobutanol is expected at 1 trillion gal/year.

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