ENGLEWOOD, Colo. - Gevo , Inc. (NASDAQ: NASDAQ:GEVO), a renewable chemicals and advanced biofuels company, has successfully remarketed its tax-exempt Green Bonds, initially issued in 2021, at a higher interest rate. The company's subsidiary, Gevo NW Iowa RNG, LLC, had the bonds, originally set at a 1.5% interest rate, remarketed to bear interest at 3.875% until March 31, 2026.
The Iowa Finance Authority first issued these bonds on April 15, 2021, to support the construction of Gevo RNG's renewable natural gas (RNG) assets in Northwest Iowa. As of today, the bonds were subject to mandatory tender and have been secured by an irrevocable direct pay letter of credit for approximately $69.6 million, with Gevo's reimbursement obligations fully cash collateralized.
Lynn Smull, Chief Financial Officer of Gevo, stated that the remarketing process concluded with an attractive bond interest rate, which aligns with the company's broader strategy of capital stewardship and maximizing effective use for delivering low-carbon projects. Smull also mentioned the potential for future refinancing of the bonds on a non-recourse basis, which could lead to the release of the cash collateral.
Gevo's mission focuses on converting renewable energy and carbon into liquid hydrocarbons for use in transportation fuels, such as gasoline, jet fuel, and diesel. These fuels, when burned, have the potential to achieve net-zero greenhouse gas emissions across their full life cycle. The company also develops renewable electricity and renewable natural gas for production processes, resulting in fuels with significantly reduced carbon intensity.
The company's success in the low-carbon fuels market is contingent upon oil prices and the value of reducing carbon emissions. Gevo's patented technology allows for the production of low-carbon products from a variety of sustainable feedstocks, aiming to establish a multi-billion-dollar business.
InvestingPro Insights
Gevo, Inc. has been making strides in the renewable energy sector, as evidenced by its recent successful remarketing of Green Bonds. To provide a broader financial perspective on the company, InvestingPro data and tips offer additional insight into Gevo's market status and investment potential.
According to InvestingPro data, Gevo's market capitalization stands at a modest $170.83 million, reflecting its position in the market. Despite an impressive revenue growth of over 1363% in the last twelve months as of Q4 2023, the company's financial health is challenged by a negative gross profit margin of approximately -78.85%, indicating that cost management is an area requiring attention.
InvestingPro Tips also reveal that Gevo holds more cash than debt on its balance sheet, which is a positive indicator of financial stability. Furthermore, the company is currently trading at a low Price / Book multiple of 0.31, suggesting that the stock may be undervalued relative to the company's book value. However, potential investors should be aware that Gevo is quickly burning through cash and analysts do not expect the company to be profitable this year.
For those considering an investment in Gevo, it's worth noting that the stock has experienced significant volatility, with a considerable return over the last week, but poor performance over the last month and year. With such dynamics at play, a deeper dive into the company's financials and future prospects is recommended. InvestingPro offers a wealth of additional tips on Gevo, and interested readers can find more information at: https://www.investing.com/pro/GEVO. To further enhance your investment research, use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Remember, there are 14 additional InvestingPro Tips available that could help guide your investment decisions and provide a more comprehensive understanding of Gevo's financial landscape.
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