10/07/2008
Having only recently trumpeted its transformation from a green energy investor into a wood waste-to-energy operator, FibreGen’s revenues are now likely to halve in the current year.
The group acquired Idaho-based wood pellet producer Coeur d’Alene Fiber Fuels (CAFF) just this April for $3m, but is now trying to sell it back to the original vendors after finding itself incapable of providing the new working capital requirements of CAFF’s bankers. This surprising resale would result in FibreGen making ‘materially’ lower sales for the current year to December than the market had been led to expect.
At the time of the acquisition, FibreGen said CAFF’s addition would double its ‘wood pellet capacity, revenues and EBITDA’.
Compounding its woes further, a minority shareholder in subsidiary Emerald Bio-Energy has exercised an option whereby FibreGen is required to buy its 25% stake. This core subsidiary was formed as the holding vehicle for the group’s intended portfolio of wood-waste businesses and bio-energy production plants around the world.
To raise the £4m funds to buy this share the company is likely to use some of the £1.9m cash it had at its December year end, as well as selling its share in a Chinese joint venture. The group had been hoping to ‘aggressively’ scale the business by moving upstream into the ownership of wood-growing assets and taking shares in biomass power production.
The company lost over two-thirds of its value on the news, the shares falling to 9.88p, giving a market capitalisation of just £2.11m. Avoid.
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| Market cap: | £2.11m |
| PE Forecast: | n/a |
| Share price: | 9.88p |
| AIM | 0pm |
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| 10/07/2008 |
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