Aemetis eyes IPO in India this year; setup SAF plant with proceeds
California-based renewable fuel producer Aemetis said that it is eyeing an initial public offering (IPO) in India later this year with the potential windfall earmarked for building a massive sustainable aviation fuel (SAF) production plant there.
“We plan to expand our biodiesel production capacity in India using cash flow from operations, but a primary use of funds from a potential IPO onto the India stock markets would include the production of SAF to meet growing global airline demand for SAF,” said Eric McAfee, president, Aemetis North America in the earnings call.
“The India plant can be expanded to supply SAF for airlines in India as well as international markets, such as the existing 10 airlines that have signed $3.8bn of agreements with Aemetis for delivery of SAF in California.”
The company said it is currently in discussions with local investment bankers and regulators and is planning to issue shares on the Indian bourse in the ongoing year.
“We’ve already been approached by very large investors about a pre-IPO investment. So, I want to say that we are open to that discussion as it strengthens the valuation of our company. So, it’s a very active opportunity in India and we’re pursuing it,” said McAfee.
Aemetis said that it will have more clarity on valuations and other terms in the second quarter of 2024.
The company said that India offers less expensive waste feedstock which can be used to produce biofuels and export SAF to the San Francisco airport where it has existing contracts.
“[India offers] a direct feedstock arbitrage from a country that has a tremendous amount of underutilised feedstock. And we already have a 50m gallon per year tallow refinery in place, direct relationships, we used to export biodiesel to Europe using tallow as a feedstock,” said McAfee.
In US, Aemetis has already received permits for construction of SAF and RD plant at Riverbank, California site.
The company said that the California plant, designed to churn out 90m gallons of fuel annually, can be tweaked to produce up to 78m gallons solely of SAF. Aemetis is deploying the Topsoe HydroFlex HEFA process to produce biofuels (RD and SAF) at the Riverbank site.
Q4 2023 results
The company posted revenues of $70.8m for the fourth quarter of 2023, an increase from $66.7m for the fourth quarter of 2022. Further breakdown showed the company’s California ethanol segment accounted for $45m of revenue whereas an additional $22m came from India Biodiesel segment during the quarter under review.
In terms of quantity sold, Aemetis sold 15m gallons of ethanol compared to 13.4m gallons during the fourth quarter 2022.
In the bottom line, despite higher topline, the company reported a net loss of $25.4m for the fourth quarter of 2023 compared to a net loss of $22.4m for the fourth quarter of 2022.