By Dennis Seid/NEMS Daily Journal
Montreal-based Enerkem Corp. says it still plans to begin building an ethanol plant in Pontotoc despite having abandoned an initial public offering in which it had hoped to raise $125 million.
Enerkem, in a filing with the Securities and Exchange Commission, said it was abandoning its proposed Nasdaq IPO “in light of current market conditions.”
Marie-Helene Labrie, Enerkem’s vice president of government affairs and communication, said in an email, said the decision was “due to unfavorable market conditions despite the interest we 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 the company raised more than $100 million last year via corporate and government financing.
Three months ago, the company filed an F-1 registration statement for the IPO. According to biofuelsdigest.com, the company had some difficulty with getting the deal off the ground, rescheduling the pricing twice this month.
Despite the setback, the company says it still plans to build the $100 million solid-waste-to-ethanol plant in Pontotoc County at the Three Rivers Solid Waste Management Authority landfill.
The company has said the plant will produce up to 10 million gallons of ethanol a year. Enerkem also has said more than 70 jobs will be created at the plant, which would be its first in the United States.
In August 2010, it began construction of a similar plant in Edmonton, Alberta, but it has yet to complete it or produce any ethanol.
According to biofuelsdigest, Enerkem lost $19.1 million in the last three quarters of last year.
Labrie said Enerkem has “the support from our current investors and strategic partners, and together with our employees, we will continue focusing our efforts on the development of our waste-to-biofuels commercial projects including our Mississippi project. We are making good progress on the development of our project in Mississippi.
The company said construction would begin “most likely” at the end of this year and it could take about 18 months to complete the facility.
Enerkem last June said it had received $60 million from fuel refiner giant Valero Energy, joining a list of investors including Waste Management, in its Pontotoc project.
Last January, it secured an $80 million loan guarantee from the U.S. Department of Agriculture. In December 2009, the U.S. Department of Energy awarded Enerkem a $50 million grant.