Gevo to review strategic alternatives

By Erin Voegele | May 31, 2016

Gevo Inc. has commenced a review of strategic alternatives and engaged Cowen & Co. LLC as a financial advisor to assist in the review. According to information released by Gevo, its board of directors and Cowen & Co. have established a process for outreach to, and engagement with, interested strategic and financial parties.

“After careful consideration, including discussions with a range of stakeholders, we believe it is an appropriate time to undertake a comprehensive review of the company’s strategic and financial alternatives,” said Ruth Dreessen chair of the board of directors of Gevo. “The board is thoroughly committed to exploring strategic and financial alternatives while simultaneously supporting management in the development of Gevo’s technology and business. We believe that pursuing both of these paths is in the best interests of all of our stakeholders, including our stockholders, and is expected to maximize the value of Gevo.”

The announcement of the strategic review was made May 31, approximately two weeks after the company published its first quarter financial results. During an investor call to discuss those results, Gevo CEO Patrick Gruber discussed upgrade activities being performed at the company’s Luverne, Minnesota, plant. He noted the company aims to have the full production line for isobutanol operational during the second quarter, producing three to five batches per month within the next couple of months, and progressing to six to seven batches a month for the remainder of the year.  

For the first quarter, Gevo reported revenues of $6.3 million, up from $5.9 million during the same quarter of last year. Net loss for the quarter was $3.6 million, compared to $7.3 million during the first quarter of 2015. A statement filed with the U.S. Securities and Exchange Commission states the company had an accumulated deficit of $343.1 million as of the close of the first quarter.

In the SEC filing, Gevo said it “expects to incur future net losses as it continues to fund the development and commercialization of its product candidates. To date, the company has financed its operations primarily with proceeds from multiple sales of equity and debt securities, borrowings under debt facilities and product sales.  Based on the company’s current operating plan, existing working capital at March 31, 2016 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2016 unless the company is able to raise additional capital to fund operations.”