Gevo Signs Letter of Intent with HCS Holding for Commercial Supply of Isooctane
February 14 2017 - 7:30AM
Gevo, Inc. (NASDAQ:GEVO), announced today that it has entered
into a Letter of Intent (LOI) with HCS Holding GmbH (HCS) to supply
isooctane under a five-year offtake agreement. HCS is a
manufacturer of specialty products and solutions in the
hydrocarbons sector, operating under the brands Haltermann Carless,
ETS Racing Fuels and EOS. HCS is owned by HIG Capital.
Haltermann Carless, one of the oldest companies in the world of
chemistry, is expected to be the direct customer with Gevo under
the proposed offtake agreement.
The LOI contemplates an offtake agreement that will have two
phases. In the first phase, HCS will purchase isooctane produced at
Gevo’s demonstration hydrocarbons plant located in Silsbee,
Texas. This first phase is expected to commence in 2017 and
would continue until completion of Gevo’s future, large-scale
commercial hydrocarbon plant, which is likely to be built at Gevo’s
existing isobutanol production facility located in Luverne,
Minnesota. Gevo expects revenue in the range of $2-3
million per year from the first phase.
In the second phase, HCS will agree to purchase approximately
300,000 to 400,000 gallons of isooctane per year under a five-year
offtake agreement. Gevo would supply this isooctane from its first
large-scale commercial hydrocarbons facility, which is likely to be
built at Gevo’s existing isobutanol production facility located in
Luverne, Minnesota. The LOI establishes a selling price that is
expected to allow for an appropriate level of return on the capital
required to build out Gevo’s existing production facility in
Luverne, Minnesota.
It is the intent of Gevo and HCS to establish further offtake
arrangements for other products such as Gevo’s alcohol-to-jet fuel
(ATJ) and isobutanol. HCS is expected to market and distribute
Gevo’s products globally on a non-exclusive basis.
“Haltermann Carless and HCS will serve as a major and
substantial offtaker of Gevo’s renewable isooctane from Gevo’s
demonstration plant and a vital offtaker from Gevo’s first
commercial hydrocarbon plant. Gevo and HCS agree to evaluate
options to make the partnership most impactful and provide maximum
credibility for Gevo’s next generation technology,” said Henrik
Krüpper, Chief Sales Officer and member of the HCS Group GmbH’s
Executive Committee.
“We are very pleased to establish this commercial relationship
with HCS Holding, which is world renowned in the industry for the
high quality of its performance fuels. We expect that they will be
an important customer and partner for Gevo,” said Dr. Patrick
Gruber, Gevo’s Chief Executive Officer.
“When we produce ATJ, we also produce other products such as
isooctane and isooctene. We believe that a binding offtake
agreement with HCS Holding is one more piece of the puzzle to
validate our case for expanding the Luverne plant,” continued Dr.
Gruber.
About Gevo
Gevo is a renewable technology, chemical products, and next
generation biofuels company. Gevo has developed proprietary
technology that uses a combination of synthetic biology, metabolic
engineering, chemistry and chemical engineering to focus primarily
on the production of isobutanol, as well as related products from
renewable feedstocks. Gevo’s strategy is to commercialize bio-based
alternatives to petroleum-based products to allow for the
optimization of fermentation facilities’ assets, with the ultimate
goal of maximizing cash flows from the operation of those assets.
Gevo produces isobutanol, ethanol and high-value animal feed at its
fermentation plant in Luverne, Minnesota. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based economy that
meets society’s needs for plentiful food and clean air and
water.
About HCS Holding and Haltermann Carless
HCS Holding is a leading manufacturer of specialty products and
solutions in the hydrocarbons sector. HCS Holding’s group includes
the brands Haltermann Carless, ETS Racing Fuels and EOS. HCS
Holding belongs to H.I.G. Europe, a subsidiary of the US private
equity company, H.I.G. Capital.
Haltermann Carless, one of the oldest chemical companies in the
world, provides innovative hydrocarbon-based specialty products and
solvents and associated services to best serve its customers. The
company operates a network of state of the art facilities for
refining, processing and blending to produce a wide variety of
specialty products in key business areas: Automotive, Middle
Distillates, Oil & Gas, Pentanes, Performance Fuels,
Performance Solvents and Special Aromatics.
For more information visit: http://www.h-c-s-group.com;
www.haltermann-carless.com; www.ets-racing.com;
www.eosl.co.uk
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which include statements relating to Gevo’s ability to
enter into a definitive offtake agreement with HCS Holding and the
expected benefits and timing of such agreement, are made on the
basis of the current beliefs, expectations and assumptions of the
management of Gevo and are subject to significant risks and
uncertainty. Investors are cautioned not to place undue reliance on
any such forward-looking statements. All such forward-looking
statements speak only as of the date they are made, and Gevo
undertakes no obligation to update or revise these statements,
whether as a result of new information, future events or otherwise.
Although Gevo believes that the expectations reflected in these
forward-looking statements are reasonable, these statements involve
many risks and uncertainties that may cause actual results to
differ materially from what may be expressed or implied in these
forward-looking statements. For a further discussion of risks and
uncertainties that could cause actual results to differ from those
expressed in these forward-looking statements, as well as risks
relating to the business of Gevo in general, see the risk
disclosures in the Annual Report on Form 10-K of Gevo for the year
ended December 31, 2015, and in subsequent reports on Forms 10-Q
and 8-K and other filings made with the U.S. Securities and
Exchange Commission by Gevo.
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
EnergyTech Investor, LLC
+1 415-233-7094
gevo@energytechinvestor.com
@ShawnEnergyTech
www.energytechinvestor.com
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