Gevo Inc. is “one of very few companies still standing” in the next-generation biofuels industry and needs a shot in the arm to realize its commercial potential, the CEO of the Douglas County-based isobutanol developer said Tuesday.
Gevo, , announced Tuesday that it is pursuing a range of “financial and strategic alternatives.” The company’s board of directors tapped investment banker Cowen & Company LLC to serve as its financial adviser in this process.
“Exploring all options, really is ‘all options,’ ” Patrick R. Gruber, Gevo’s chief executive, said in an interview Tuesday with The Denver Post.
What is comes down to, he said, is that Gevo has received a lot of interest in isobutanol as jet fuel and isooctane as gasoline. The company needs growth capital.
Gruber didn’t disclose how much Gevo is seeking or what structure — sale, joint venture, investment or the like — could result in those additional funds. Gevo is seeking to build out its production plant in Luverne, Minn., which is producing ethanol and isobutanol; switch production entirely to isobutanol; and add a jet fuel/isooctane plant, he said.
“This is true, commercial development,” he said. “This isn’t about technology development.”
Gevo’s product already is on the market, he said, noting that by mid-June, Alaska Airlines is scheduled to fly one of its commercial planes using Gevo’s alcohol-to-jet fuel.
Gevo ended its most recent quarter with a deficit of $343.1 million, a continued effect from the cost-intensive practice of developing a bio-based fuel and . But the company’s working capital also had grown insufficient to pay for operations through the rest of the year, Gevo’s management disclosed in a May 12 filing with the U.S. Securities and Exchange Commission.
Gevo officials gave a “going concern” qualification, indicating that substantial doubt was raised about the company’s ability to continue. The company had $8.6 million in cash and cash equivalents on hand at the end of March.
“The Company’s transition to profitability is dependent upon, among other things, the successful development and commercialization of its products and product candidates and the achievement of a level of revenues adequate to support the company’s existing cost structure,” Gevo officials said in the filing made March 12. “The company may never achieve profitability or generate positive cash flows, and unless and until it does, the company will continue to need to raise additional cash.”
That could come via private placements, public offerings or arrangements with other firms, Gevo said.
Gevo’s plans for this year include increasing its production of isobutanol at its plant to 1 million gallons; lowering the cost of producing isobutanol to $3 to $3.50 per gallon; and increasing sales of the biofuel in markets like marina, alcohol-to-jet and solvents.
