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Gevo expects to pay off outstanding secured debt balance of $12.7M by year’s end

The company made the upbeat announcement after reporting 2Q financial results showing it flushed with a kitty of $80.6 million in cash and cash equivalents

Gevo Inc - Gevo Inexpects to pay off its entire outstanding secured debt balance of $12.7 million by year’s end based on strong balance sheet
Gevo also noted it has begun production of about 50,000 gallons of renewable isobutanol at its production facility in Minnesota

Gevo Inc (NASDAQ: GEVO), citing a strong balance sheet and available cash, said Tuesday it expects to pay off its entire outstanding secured debt balance of $12.7 million by year’s end. 

The company made the upbeat announcement after reporting 2020 second-quarter financial results showing it flushed with a kitty of $80.6 million in cash and cash equivalents -- compared to just $6.3 million in the prior-year quarter. 

In addition, Gevo noted that late last month it began production of about 50,000 gallons of renewable isobutanol at its production facility in Luverne, Minnesota. Once the renewable isobutanol has been produced, Gevo will ship the isobutanol to the South Hampton facility for use in the production of renewable hydrocarbons during the first quarter of 2021. 

READ: Gevo inks joint development agreement with TOTAL's polymers division to develop renewable isoamylene

Gevo said it plans to produce an additional 50,000 gallons of renewable isobutanol during the second quarter of 2021 for use at the South Hampton facility. It expects to periodically produce renewable isobutanol in this manner until a new, larger hydrocarbon production facility is financed and constructed.

The company also pointed out another operational advancement -- a 10-year renewal deal to supply renewable hydrocarbons to Trafigura Trading LLC. With this agreement, Gevo said it now has about 48MGPY (million gallons per year) of offtake agreements in place, collectively representing about $1.5 billion of revenue across the life of the contracts.

For its 3Q, which ended September 30, Gevo reported that revenue was affected by its decision in March to terminate its production of ethanol and distiller grain at the Luverne plant due to COVID-19 restrictions and an unfavorable commodity environment.  

Revenue totaled $200,000 for the quarter compared to $6.1 million in the same quarter of 2019. Hydrocarbon revenue decreased year-over-year to $100,000 for the quarter compared to $600,000.

“With customers pinned down and enough money in the bank to complete the engineering and project development work needed to bring projects to financial close next year, and because we have several interested project equity investors engaged in detailed due diligence, I believe that our project financing activity with Citigroup is going well, so far,” said CEO Patrick Gruber in a statement.

"We continue to work on securing more customer agreements and expect to announce one or more in the coming months.  Overall, we are progressing well. We need to continue to make progress and keep on track”.

Contact the author: [email protected]

Follow him on Twitter @PatrickMGraham

Quick facts: Gevo Inc

Price: 11.03 USD

NASDAQ:GEVO
Market: NASDAQ
Market Cap: $1.42 billion
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