Range Fuels Inc. (ETHHA175), a closely held U.S. cellulosic ethanol company that was offered $156 million in federal government backing, sold its only factory to LanzaTech NZ Ltd. as part of a government-approved liquidation.
The U.S. Department of Agriculture in October approved lender AgSouth Farm Credit to hold the foreclosure sale yesterday. The deal didn’t include Range’s intellectual property, David Aldous, the company’s chief executive officer, said yesterday in an e-mail, declining to give details.
The liquidation comes as other government-backed renewable energy companies have failed. Solar panel maker Solyndra LLC and energy storage company Beacon Power Corp. filed for bankruptcy last year after receiving government loan guarantees under a different program.
Range Fuel’s plant, located in Soperton, Georgia, was completed in 2010 and was shut in January 2011 without ever producing ethanol. It was designed to process wood chips into as much as 10 million gallons (37.8 million liters) of biofuel a year with plans to expand this to 100 million gallons.
The Agriculture Department announced an $80 million loan guarantee for the project on the final day of President George W. Bush’s term. The Energy Department, under the same administration, offered a $76 million grant for the plant.
Range received $46.3 million of the grant and $42 million of the guaranteed loan, before the outstanding balance was repurchased by the Agriculture Department Nov. 17, according to an Agriculture Department document. Broomfield, Colorado-based Range received more than $160 million from private investors before shutting the plant.
LanzaTech, like Range, is backed by Khosla Ventures, the investment company owned by billionaire Vinod Khosla. The Auckland, New Zealand-based biofuel company is developing a technology to convert industrial gases such as carbon monoxide into ethanol using microbes. Chief Executive Officer Jennifer Holmgren wasn’t immediately available to comment yesterday as she was traveling.
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