Imperium delays IPO plans
The island company has a contract to supply HECO with biodiesel fuel
SEATTLE » Imperium Renewables Inc.
, a biodiesel fuel producer with plans to build a $90 million refinery in Kapolei, said yesterday it will postpone an initial public offering it had planned to help pay for the Hawaii plant and two others.
However, the company said it still hopes to continue with its plans for the Kapolei refinery, which Hawaiian Electric Co. in October selected as exclusive biodiesel supplier for its new Campbell Industrial Park plant.
Imperium -- whose chief executive officer, Martin Tobias, suddenly quit two weeks ago -- said it postponed the share offering due to "unfavorable market conditions," and that cutbacks or layoffs are possible.
Imperium filed for the IPO, which was expected to raise $345 million, in May. The company said it would use about $220 million from the stock sale to open 100-million-gallon refineries in Hawaii, Argentina and Philadelphia.
Spokesman John Williams said that cutbacks or layoffs at the 107-employee company could occur because of the cancellation of the IPO, but he could not comment on the fate of the planned refineries, stating only that it was "logical to assume that building three more plants requires more capital."
"It is safe to say there will be some level of belt tightening, but whether that comes from operations or elsewhere it has not been formally decided yet," he said.
"However, we remain committed to our goal of building a biodiesel production facility in Hawaii," Williams said in a statement yesterday.
Hawaiian Electric spokesman Peter Rosegg said yesterday that the utility "is committed to biofueling the new generating unit on Oahu, and this news doesn't impact those plans."
Imperium's contract with Hawaiian Electric calls for the supply of 5 million to 12 million gallons of biodiesel annually, beginning in mid-2009.
Imperium could lose other customers if delays occur in construction of its planned plants. The company noted in its IPO filing that it has an exclusive agreement to supply biodiesel to Constellation Energy and its affiliates on the East Coast. If Imperium can't supply 100 million gallons by December 2008, it could lose the contract.
With the IPO called off, the company is seeking more capital in the private markets. In the near term, Williams said Imperium will operate from the cash flow generated at its Grays Harbor plant. Imperium also had $25.8 million in cash and short-term investments on the books as of June.
John Cook and Joseph Tartakoff of the Seattle Post-Intelligencer and Star-Bulletin reporter Jennifer Sudick contributed to this report.