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Coskata files registration statement for proposed IPO

By Bryan Sims | December 18, 2011

Coskata Inc. is the latest high-profile biorefining firm to try its hand in the public capital markets as the Warrenville, Ill.-based cellulosic ethanol and biochemical firm filed an S-1 registration statement on Dec. 16 with the U.S. Securities and Exchange Commission to raise a proposed maximum of $100 million in an initial public offering of shares of its common stock.

Since 2009, Coskata has operated its demonstration-scale production facility in Madison, Pa., referred to as “Lighthouse” by the company, based on both biological and thermochemical conversion platforms that can convert a range of carbonaceous feedstocks such as wood waste, agricultural residues and municipal solid wastes into cellulosic fuel grade ethanol. In June, Coskata achieved a milestone by successfully amassing over 15,000 hours of operation at the facility, converting primarily wood biomass and MSW into cellulosic ethanol.

According to its S-1 statement, Coskata has identified Boligee, Ala, as the site for its first commercial cellulosic ethanol production facility, referred to as “Flagship”, which will be capable of producing 78 MMgy of cellulosic ethanol using wood chips and wood waste as feedstock. The company plans to build the facility in two phases. The first phase, according to the company, will consist of installing an initial annual production rate of 16 MMgy, which is expected to be complete by 2013 and will represent a single integrated production line of its technology platform. Phase two will involve adding an additional 62 MMgy, expected to be complete by 2015. Coskata issued a letter of intent with Fagen Inc. and Harris Group Inc. in June to lead the EPC process that will include in its scope the project detailed design, procurement, construction and commissioning of its planned commercial project in Alabama.

In its S-1 statement Coskata said, “Phase I of Flagship will be financed by a portion of the proceeds of this [IPO] offering, cash on hand and $87.9 million of debt financing supported by a 90% loan guarantee through the USDA’s 9003 Biorefinery Assistance Program.”

In addition, when fully built out, Coskata expects that its first commercial plant will produce cellulosic ethanol at an unsubsidized cash operating cost of less than $1.50 per gallon, net of coproduct sales, assuming a feedstock cost of $64 per bone dry ton of softwood, according to its S-1 filing.

Coskata, together with its strategic collaborator Total Petrochemicals, is also developing “microorganism-based technology” to produce propanol, a three-carbon building block for making propylene, from the same feedstocks the company would use to produce cellulosic ethanol. Over time, according to Coskata, it expects to eventually expand its platform to produce valuable four, five and six carbon chain chemicals, adding that it has already demonstrated at lab-scale the production of propanol, butanol, butanediol, hexanol, organic acids and certain fatty acids.

As a result of its low-cost syngas fermentation process, Coskata sees market growth for its biochemicals, stating, “We are able to immediately address the 23 billion gallon global fuel-grade ethanol market,” the company stated in its S-1 filing. “Our cellulosic ethanol will also address the 1.7 billion gallon global industrial ethanol market and can be converted into ethylene, a $140 billion market. In the future, our propanol production technology, combined with alcohol dehydration technology to produce propylene from propanol, under development by Total Petrochemicals together with IFP Energies Nouvelles & Axens, is expected to target the $100 billion global propylene market.”

 

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