Canadian cellulosic companies announce new directions
On April 26, Enerkem Inc. filed a notice with the U.S. Security and Exchange Commission to withdraw its registration statement, effectively abandoning plans to pursue an initial public offering (IPO) at this time. A few days later, Iogen Energy Corp. announced it has agreed to a new plan with its owners that will result in the loss of 150 jobs and terminate plans for a biorefinery in Manitoba.
In its SEC filing, Enerkem said that in light of current market conditions the decision has been made not to proceed with the initial public offering contemplated by the prior registration statement. That registration statement was not declared effective by the SEC and Enerkem noted that no securities were sold in connection with the offering described in the statement.
According to Enerkem’s Vice President of Government Affairs and Communications Marie-Hélène Labrie, Enerkem decided to withdraw its planned IPO due to unfavorable market conditions, and is doing so despite interest that was received from key potential investors. “At this point in time, we believe there are better options for us to finance our growth plan as a private company,” she said. “We have the support of our current investors and partners, and together with our employees, we will continue focusing our efforts on the development of MSW-to-biofuels commercial projects in Canada and the U.S., and on our technology.”
Enerkem originally filed the registration statement with the SEC for a proposed IPO on Feb. 3. The filing did not disclose the number of shares the company planned to sell. It also contained no information regarding an expected value for public offering per share.
According to information published by Enerkem, it has operated its 4.8 metric ton per day pilot-scale facility, and operates a 48 metric ton per day commercial demonstration plant that features an annual production capacity of 1.3 MMgy. The company has a 10 MMgy commercial-scale facility under construction in Edmonton, Alberta, with plans to build similar plants in Mississippi and Quebec. In its registration statement, Enerkem noted that the majority of the proceeds from the planned IPO would go to support the Edmonton and Mississippi projects.
While Enerkem has cancelled its plan for an IPO, another Canada-based cellulosic ethanol company has abandoned plans to build a biorefinery in Manitoba. On April 30 Iogen Energy announced it has agreed to a plan with its joint owners—Royal Dutch Shell and Iogen Corp.—to refocus its strategy and activities.
According to information released by Iogen, the refocusing initiative will lead to a smaller development program at Iogen Energy and a loss of 150 jobs. “Shell continues to explore multiple pathways to find a commercial solution for the projection of advanced biofuels on an industrial scale, but the company will not pursue the project it has had under development to build a larger scale cellulosic ethanol facility in southern Manitoba,” said the companies in a statement.
Although many jobs will be lost, Iogen Corp. said it will continue to employ approximately 110 people at its headquarters in Ottawa, Ontario. Iogen also noted that it intends to expand its line of offerings with new technology for the production of advanced and cellulosic biofuels, and that it’s industrial enzymes business will not be affected by the changes.