Coskata plans IPO to fund cellulosic ethanol plant

Biofuels developer Coskata has announced plans to raise up to $100 million from the public markets to help fund a commercial-scale plant turning woody biomass into ethanol.

The Illinois-based firm has a proprietary process capable of turning non-food feedstocks – such as forest and agricultural residues and municipal waste – into fuel and chemicals.

Next year, it expects to begin constructing a commercial-scale cellulosic ethanol production facility in Boligee, Alabama, initially producing 16 million gallons of ethanol a year. Coskata says this plant should produce ethanol at a cash operating cost of less than $1.50 a gallon, net of co-product sales, assuming a feedstock cost of $64 per bone-dry ton of softwood.

A second phase expansion, envisaged to be completed in 2015, will bring the output up to 78 million gallons/year.

The first phase “will be financed by a portion of the proceeds of this offering, cash on hand and $87.9 million of debt financing supported by a 90% loan guarantee through the US Department of Agriculture’s 9003 Biorefinery Assistance Program,” Coskata said in documents filed to the US Securities and Exchange Commission.

Coskata reported a $23.3 million net loss in the nine months to 30 September, and has not made a profit since its creation in 2006.

Over several financing rounds, it has raised about $80 million from venture capital funds Khosla Ventures, Blackstone, ATV, GPV and Total Energy Ventures International.

Investment banks Citigroup, Barclays Capital and Piper Jaffray are underwriting the initial public offering (IPO).

Coskata joins a growing list of biofuel company flotations. Fulcrum Bioenergy, Mascoma, and Renewable Energy Group have all filed for $100 million-plus IPOs in recent months.

Texas-based Kior raised $150 million at its IPO in June while California’s Solazyme raised nearly $200 million in May. Colorado firm Gevo raised almost $96 million in February.

source: environmental-finance