Fulcrum withdraws IPO, proceeds with plans to build ethanol plant

By Holly Jessen | December 04, 2012

Fourteen months after filing a registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering (IPO) of its common stock, Fulcrum BioEnergy Inc. withdrew it and is proceeding to close on $175 million in funding for the municipal solid waste-to-ethanol project. “It has been a challenging IPO market for development companies such as Fulcrum,” Rick Barraza told Ethanol Producer Magazine. “We would look to restart the IPO process as soon as these market conditions improve.”

The California-based company is working to build a 10 MMgy municipal solid waste (MSW)-to-ethanol plant in Sierra, Nev., about 20 miles east of Reno, Nev. Although the IPO effort wasn’t successful, the company has identified and secured commitments for alternate financing, Barraza said. That includes a $105 million conditional loan guarantee from USDA, which was announced in August.“We would look to start construction on Sierra sometime in the middle of 2013 after we have secured all of the capital necessary to fund construction of the plant,” he said. “Then its 18 to 24 months to construct the facility, so commercial operations would be late 2014 or early 2015.”

The company also said its engineering and technology teams had recently enhanced the proprietary design of the MSW-to-ethanol process. The numerous improvements are expected to dramatically reduce production costs to 75 cents per gallon, down from $1.25 a gallon. In addition, future Fulcrum plants are expected to cost 50 cents per gallon, down from the 70 cents per gallon that the company had said previously. "These enhancements underscore our confidence in the attractive economics of our business model while further advancing Fulcrum as the industry's low-cost producer of low-carbon transportation fuels," said E. James Macias, Fulcrum president and CEO.