GEVO OVERVIEW REPORTThe Opportunities
Gevo believes it is the leader in the development and commercialization of low carbon footprint hydrocarbons for jet fuel and gasoline and is commercially ready. The business pipeline has expanded rapidly with significant offtake agreements of 17 MGPY of hydrocarbons with marquee customers set for delivery in 2023. Regulations such as the European Green Deal as well as ESG principals are driving demand for renewable fuels globally. Gevo expects revenues to grow from $33 million in 2018 to $46-56M by 2021 and $330-413M by 2023/24 assuming capacity is in place. The intermediate step to produce and sell low-carbon ethanol is almost complete and this should improve cash flow at the company.The Obstacles
The first issue to address is the disposition of the convertible notes the company has outstanding due December 31st, 2020. There are various outcomes that could all impact the company differently. The second is obtaining growth capital for capacity expansion. Gevo is working on procuring equipment finance for Phase 1 and Phase 2 would need approximately $250 million based on 20MGPY in hydrocarbons but has flexibility to adjust plant size and capital needs. The company believes that project finance at the plant level will resolve this and is currently exploring options and partners.