US biofuels company pulls back on IPO

US-based biofuels company Coskata has decided not to go forward with a proposed $100 million (€82.5 million) initial public offering (IPO) as it looks instead towards natural gas options.

Plans to build a commercial scale plant in Alabama, which would convert wood waste to ethanol, will be put onto the back burner as it looks into feeding the plant with natural gas, which is currently available very cheaply.

‘A move to natural gas would mean we are likely to find that capital needed for commercialisation from private investors, who he said have expressed great interest in the technology,’ says Coskata CEO Bill Roe. ‘With natural gas prices at historic lows, we’ve decided to redirect our commercialisation strategy as investors showed real interest.’

Coskata filed IPO papers with the Securities and Exchange Commission in December buoyed by other biofuels companies doing the same with some success. However, more recently, many biofuels producers which have gone public have seen their stock prices drop below that of initial offerings.

Heather Youngs, a senior analysis at the Energy Biosciences Institute in Berkeley, was quoted as saying that that pattern was ‘pretty consistent and people get disillusioned with the long time period it takes to get to commercial scale’.