News blog
Renova Energy
- BY: Andrew Hore |
- POSTED: 10/02/2008 |
Renova Energy needs to raise more cash in order to complete its new ethanol production plant in Idaho.
Construction of the Heyburn plant was suspended at the end of 2007 because of cost overruns. The plant was budgeted to cost $45m but it looks as though it will cost 30% more than that. A 21 MMgallons/year ethanol production facility and 3.2 MW waste-to-energy power plant is planned for the site.
Renova has employed engineering consultants to replan the construction of the plant. That should be completed by the end of February and it will enable Renova to start to raise debt and issue shares to complete the project.
Renova has breached some of its banking covenants but its banks have agreed not to act on this until 2 April. This is dependent on the revised plan for the project and trading not deteriorating.
The existing operations continue to generate cash. Ethanol sales have risen from 8.1MMgallons to 10.9MMgallons in the 10 months to January 2008. The average ethanol price remained flat at $2.27/gallon. Production is being increase at the existing plant in Wyoming.
The shares fell 1.25p to 7.75p. At the beginning of the year the shares were four times that price.
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