Gevo Tumbles on Production Delays at Minnesota Biofuel Plant
Gevo Inc. (GEVO), the U.S. biofuel producer backed by French oil company Total SA, tumbled the most in 13 months on production delays at its facility in Luverne, Minnesota, and plans to raise capital.
Gevo fell 20 percent to $1.32 at the close in New York, the most since September 2012.
The company halted production of isobutanol in Luverne in September 2012 after contamination issues prompted the company to adjust its manufacturing process. It resumed output on a small scale in June and hasn’t returned to commercial-scale operations.
“Gevo’s plant ramp-up is indeed about a quarter behind versus what the market had been expecting,” Pavel Molchanov, an analyst with Raymond James & Associates Inc. in Houston, said today in an e-mail. The Englewood, Colorado-based company said in May it would resume commercial production this year.
The company is “likely to be raising capital” in the fourth quarter or the first quarter of next year, Mike Willis, Gevo’s interim chief financial officer, said on a call with analysts yesterday.
“Gevo is starting to run low on cash, which means the market has the added worry of dilution risk,” Molchanov said.
Gevo uses corn and plant waste to make isobutanol, a compound that may be blended with gasoline or converted into hydrocarbon fuels and chemicals.
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