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Gevo targeting between $93-$107 million with IPO; more prospective partners

Advanced biofuels and chemicals company Gevo, Inc. is targeting raising between $93 million and $107.3 million through a public offering of 7,150,000 shares priced between $13 and $15, according to its latest amendment to its S/1 filed with the SEC.

Gevo uses synthetic biology and chemical technology to convert renewable raw materials into isobutanol and renewable hydrocarbons that can be directly integrated on a “drop in” basis into existing fuel and chemical products. Its initial S-1, filed last year, anticipated a $150 million maximum from the offering. (Earlier post.)

Gevo says it is developing a pipeline of future customers for its isobutanol and its derivative chemical products across multiple global chemicals and fuels markets. In anticipation of targeted initial commercial production of isobutanol in the first half of 2012, it has entered into a number of letters of intent and is negotiating the final terms of several definitive agreements with future customers and partners in the chemicals and fuels markets, including:

  • Lanxess Inc., a leading chemicals company;
  • Total Petrochemicals USA, Inc., an affiliate of Total S.A., a major oil and gas integrated company;
  • Toray Industries, Inc., a leader in the development of fibers, plastics and chemicals;
  • United Air Lines, Inc., a major commercial airline; and
  • CDTECH, a leading hydrocarbon technology provider for the petrochemical and refining industry.

Gevo is also in discussions with major refiners that have indicated an interest in forming partnerships with us to manufacture renewable jet fuel using our isobutanol. It also intends to develop relationships with companies that are engineering and piloting the processes necessary to convert isobutanol to bio-based jet fuel and then license this technology to refiners and petrochemical companies that intend to use its isobutanol and other bio-based butanols for the production of biobased jet fuel.

It is also in discussions with a number of companies that may consider using its isobutanol, without modification, as a specialty chemical or a fuel blendstock. In November 2010, it entered into a non-binding letter of intent with Sasol Chemical Industries Ltd., acting through its Solvents Division, pursuant to which it intend to negotiate the terms of a definitive agreement for the sale and distribution of our isobutanol to be used primarily in solvent applications. This ready market for isobutanol is particularly valuable, Gevo says in the statement, because the use of isobutanol as a specialty chemical does not require regulatory approval.

It is also actively pursuing commercial relationships with petrochemical manufacturers that have the ability to produce butenes and other hydrocarbon products from isobutanol and with large brand owners regarding the use of isobutanol in the production of biobased plastics, fibers, rubber and other polymers.

In November 2010, Gevo also entered into a non-binding letter of intent with South Hampton Resources, Inc., or SHR, an independent specialty petrochemical manufacturer with more than 50 years of experience in toll processing and product development, pursuant to which SHR will develop processes to dehydrate our isobutanol into isobutylene to serve the market for isobutylenes and to further process at least a portion of that isobutylene to produce kerosene for use as a renewable jet fuel blendstock.

Gevo said it is also currently in discussions with several ethanol plant owners that have expressed an interest in either selling their facilities to Gevo or entering into joint ventures with Gevo to retrofit their plants to produce isobutanol. Collectively, these ethanol plant owners represent more than 2.4 BGPY of ethanol capacity.

(A hat-tip to Matt!)



Makes sense to build an income from isobutanol and try to convert some to kerosene.

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