Another Biofuel IPO Shelved

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For the second time this year, a start-up company has shelved a planned IPO. This time its Coskata Inc., an Illinois-based company that manufactures ethanol from any carbon-based material. In April, Canada’s Enerkem Inc. withdrew its planned IPO.

Coskata, partially funded by Total SA (NYSE: TOT) and The Blackstone Group LP (NYSE: BX), had hoped to raise $100 million to construct a plant in Alabama that would have produced ethanol from wood waste. Now the company says it will seek private funding.

The fortunes of publicly traded biofuels companies like Codexis Inc. (NASDAQ: CDXS), Amyris Inc. (NASDAQ: AMRS), Solazyme Inc. (NASDAQ: SZYM), Gevo Inc. (NASDAQ: GEVO), BioFuel Energy Corp. (NASDAQ: BIOF), and KiOr Corp. (NASDAQ: KIOR) has been mixed at best. All except Solazyme currently trade at least -50% below their 52-week highs and BioFuel Energy is down nearly -90%.

Coskata also plans to shift the location of its proposed plant and to use natural gas rather than wood waste as the feedstock for the ethanol conversion. The company’s CEO cited the “compelling economics” of using natural gas as a feedstock and also noted that converting natural gas to ethanol is “a much simpler process” in an interview with Bloomberg.

The company has not withdrawn its IPO filing, but plans to wait until a later date to continue with the offering.

The company’s latest Form S-1 is available here.

Paul Ausick