Alliance Bio-Products files 506(c) to get funds for ethanol plant
Alliance Bio-Products has submitted Regulation D (506(c)) offering to the US Securities and Exchange Commission (SEC) to secure funding from investors to purchase a bioethanol plant in south-east Florida.
The acquisition will allow Alliance BioEnergy to increase production capacity of manufacturing the eco-friendly alternative to petroleum-based fuels and other products by leveraging its patented Cellulose to Sugar (CTS) conversion process.
Under the offering, the company can sell one million shares of its securities to accredited investors.
Alliance BioEnergy will offer 8% Convertible Preferred Stock at $10 per share, with a preferred minimum investment of $5,000.
The offering will be conducted through the company website.
Alliance Bio-Products president Jim Brown said: “We look forward to taking the next steps in solidifying our purchase of our own cellulosic ethanol production plant and believe the increased demand for cheaper biofuels will continue to drive growth of the company and the industry.
“This offering will be the first step of many to expand the company's capacity and enable a faster turnaround through the production of less expensive ethanol from local agricultural and yard waste.
“We believe the purchase of this plant will put our company in the best position possible to reach mass commercialisation of our product and to ultimately produce revenue and bring value back to shareholders.”
Alliance Bio-Products has made an offer to acquire eight million gallon per annum (Mgpa) ethanol facility in Indian River County, Florida.
Following the purchase, the company intends to replace the current process followed at the facility with its CTS process under a sub-licence from Alliance BioEnergy.
The plant is expected to begin its operations early next year, subject to completion of the plant negotiations and purchase.
The bioethanol plant is expected to generate $25m in EBITDA next year, allowing it to then improve its capacity to 16Mgpa, potentially generating $54m in EBITDA in 2019.
The plant holds the maximum capacity of 34Mgpa, generating $112m in 2021.