Biofuel Energy Corp. (Nasdaq: BIOF) went public Monday, raising $55 million for its ethanol business.
The IPO price was cut to a maximum of $10.50 a share, down from the original $16-$18 per share. The number of shares sold was also cut by about 45 percent from the 9.5 million the company initially filed to sell.
The offering price gives Biofuel Energy an initial market cap of about $340 million.
The lower prices reflect the crowded ethanol market – and BIOF has no revenue. The company plans to use the proceeds to pay down debt and for construction costs for various plants.
BioFuel Energy will also sell 4.25 million shares in a private placement to affiliates of Greenlight Capital Inc., Third Point LLC and its chairman, Thomas Eleman, making the total capital raise about $94 million.
The company plans to build five large dry-mill ethanol plants on corn-belt sites where Cargill, Inc has a strong local presence and, in most cases, adjacent to grain storage facilities owned by or affiliated with them.
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