Jan. 7 (Bloomberg) — Algae.Tec Ltd., an Australian
producer of algal oils used in clean fuel, plans to sell $200
million of bonds in Europe to fund expansion in the Americas.
The company intends to start the offering within the next
month and complete it by mid-year, Chairman Roger Stroud said by
telephone. The proceeds will finance new factories in Texas and
Brazil that will produce algae for biofuels, he said.
Algae.Tec is expanding after the U.S. approved a $1.01-a-
gallon tax credit for producers of algal fuels. That followed a
decision by the Environmental Protection Agency in September to
raise the requirement for biodiesel in refined products. A year
earlier, U.S. regulators allowed airlines to fly passenger jets
using a biofuel blend.
Algae.Tec plans to retain a stake of more than 90 percent
in the new factories, where feasibility studies will be
completed this month, according to Stroud. The bond sale is
“the most appropriate mechanism for this type of project
providing a substantial leverage on equity,” he said.
The company, based in Perth, has already completed a study
for a site in eastern Australia and expects project approval by
the end of the quarter.
“Based on current commodity prices the financials around
all three projects are showing strong returns,” Stroud said.
Algae.Tec plans to have all three funded and under construction
within 12 months. The first will take about two years to build.
The company’s technology can also trap carbon emissions
that are released from industrial plants, which it can then use
to feed algae production. In Texas, Algae.Tec is working with a
“large power group” to reduce its emissions, while in Brazil
it’s looking to team up with a food manufacturer, it said.
The company said in September it planned to build as many
as six factories by 2015 at a cost of about $100 million each.
The same month it agreed to work with Deutsche Lufthansa AG to
build a European plant that uses algae to make jet fuel. Several
sites have now been identified, including in Spain, and a final
decision is expected by the end of the quarter, Stroud said.
To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
