SAFX begins trading on Nasdaq via SPAC

opinion

by Fayaz Hussain

June 16, 2025

Special purpose acquisition companies (SPACs) are synonymous with disappointment. Since their virality in Covid, countless SPACs have brought speculative ventures public, promising revolutionary technologies and investor returns.

Ideas with little more than pitch decks and patent applications garnered billion-dollar valuations on theoretical applications rather than operational realities. The results have been devastating. The majority of SPAC-merged companies are trading below their combination valuations while burning through capital at alarming rates.

Against this morbid scene, sustainable aviation fuel (SAF) producer XCF Global’s merger with Focus Impact BH3 Acquisition seems like a bright spot. The company became the first and only pure-play listed SAF producer in the US. XCF’s chief financial officer Simon Oxley spoke to SAF Investor about why they are different to other SPACs and SAF producers: “We’re an operating business [from] day one.”

According to its prospectus, XCF Global’s merger carries a pro-forma enterprise value of $1.83bn, representing a pre-money enterprise value of $1.75bn. Existing shareholders are rolling 100% of their equity while maintaining 94.8% ownership of the combined entity. This level of retention exceeds typical SPAC transactions where management often seeks immediate liquidity.

The rationale for this valuation can be pinned to XCF’s operational foundations. The refiner already began commercial production of SAF back in February 2025 at its New Rise Reno facility. The company delivered its first shipment in March 2025. It maintains a nameplate capacity of 38m gallons. While it focuses on production, it has a 15-year agreement with oil major Phillips 66 for both feedstock supply and product offtake.

From day one, XCF has said it wants to produce SAF fast with proven technology rather than experimental approaches. This helps the company hit the ground running by delivering final product without waiting for the technology to mature. Oxley explained the rationale behind this: “It’s not like traditional oil and gas – you can’t build a world-scale facility and have it up and running in two and a half years like you can with a refinery.” His assertions ring true. Other players in the space with newer technologies have struggled to deliver the molecules.

However, what the XCF prospectus doesn’t mention is the company’s growth plans. The management sees an opportunity in the changing biofuels landscape. “There are a lot of renewable diesel facilities that are effectively bankrupt. Many have gone through debt-for-equity swaps, so now you have banks or former creditors holding equity they don’t want, with no real outlet or liquidity for it,” says Oxley.

“From a growth perspective, it’s much faster for me to step in and say: ‘I’ll offer you equity in our business – so long as it’s accretive to us and our shareholders.’ That gives us a pathway to expand and diversify our supply sources. I can grow anywhere along the SAF value chain.”

This is where XCF says it wants to leverage the existing infrastructure to expand by avoiding competing for scarce development sites and navigating lengthy permitting processes.

“If there’s an existing renewable diesel facility that’s no longer operational – maybe even bankrupt, with debt already written down – we can say, ‘Look, we’ll bring you into the platform, we’ll give you equity.’ That creates value without needing to start from scratch,” Oxley tells us.

“The debt’s been converted to equity – we’ll come in and make the investment to convert the facility to SAF and then by converting it to SAF, we’ve effectively enhanced our EBITDA.”

The company maintains an active development pipeline across multiple US states, with a second Nevada facility planned adjacent to the existing plant. “We have the land next door and obviously the cost benefits are great – you can think of it like a hub-and-spoke type model,” he says. The project development pipeline also includes facilities in North Carolina and Florida, each expected to have a 40m gallon annual production capacity.

“The big value is actually having more optionality around storage tanks … but it also means that going forwards as you’re doing maintenance, you can keep one facility up and running, utilise the storage in the other facility, whilst you’re doing the maintenance on that facility. So, your operating costs are controlled or even reduced.”

Beyond SPAC proceeds, XCF has secured an equity line of credit with Helena Global Investment Opportunities I, an affiliate of Helena Partners. The ELOC agreement is intended to serve as a supplementary source of liquidity, offering XCF the optionality to pursue accretive growth opportunities as they emerge.

Oxley’s financing strategy for XCF is simple: Operational cash flow reinvestment, strategic equity-for-assets transactions with distressed operators, traditional project financing enhanced by proven operational track record and selective participation in government programmes where available.

Unlike many SPAC targets that struggle with public company requirements, XCF benefits from management with relevant experience. The company recently onboarded another Tellurian executive Pamela Abowd as its chief accounting officer (Oxley also joined from Tellurian).

The timing of XCF’s combination coincides with industry consolidation opportunities that require liquid equity currency, making the SPAC structure strategically advantageous rather than merely convenient. The company’s focus on operations and growth contrasts sharply with other companies in the SAF space, with ability to produce renewable fuels and secure long-term partnerships.

The company has begun trading under ticker SAFX on NASDAQ, offering public market investors access to a sector that has been largely dominated by private equity and development-stage ventures.

“We are proud to begin our journey as a public company,” said Mihir Dange, CEO at XCF. “The public listing enables us to accelerate development of our SAF platform and expand production to meet the aviation sector’s growing demand for low-carbon fuel solutions.”

Whether XCF can execute its ambitious consolidation strategy remains to be seen. But its operational foundation provides a more solid foundation than the vast majority of listed SAF players.