Gevo Enters into Exchange Agreement with Whitebox
20 April 2017 - 11:00PM
Gevo, Inc. (NASDAQ:GEVO), announced today that WB Gevo, Ltd.
(“Whitebox”), the holder of the Company’s issued and outstanding
Senior Secured Convertible Notes, due June 23, 2017 (the “2017
Notes”), and the Company have entered into an Exchange and Purchase
Agreement (the “Purchase Agreement”) pursuant to which Whitebox has
agreed to exchange (the “Exchange”) all $16.5 million of the
existing 2017 Notes for the Company’s newly created 12.0% Senior
Secured Convertible Notes due 2020 (the “2020 Notes”). The
Exchange and the issuance of the 2020 Notes require stockholder
approval.
The key terms of the 2020 Notes are as follows:
- Maturity Date: The 2020 Notes will
mature on March 15, 2020.
- Interest: The 2020 Notes will accrue interest
at 12% per annum, with 10% payable in cash and 2% payable as
Payment in Kind (“PIK”) interest. The PIK interest is paid by
increasing the principal amount of the 2020 Notes by the amount of
PIK interest due.
- Conversion and Conversion Price: The 2020
Notes are convertible, at the option of the holders, into shares of
the Company’s common stock. The 2020 Notes will have an initial
conversion price (the “Conversion Price”) equal to the lesser of
(i) $1.196 per share, or (ii) a premium of 15% to the closing price
of the Company’s common stock on the date of the Exchange.
- Conversion Price Reset and Adjustments: Upon
certain equity financing transactions by the Company, the holders
will have a one-time right to reset the Conversion Price (i) in the
first 90 days following the Exchange, at a 25% premium to the
common stock price in the equity financing and (ii) after 90 and
before 180 days following the Exchange, at a 35% premium to the
common stock share price in the equity financing.
- Holder Option: The holders have an option,
subject to certain conditions, to purchase up to an additional $5.0
million aggregate principal amount of 2020 Notes within 90 days of
the closing of the exchange contemplated by the Purchase
Agreement.
The Exchange and the issuance of the 2020 Notes requires
stockholder approval and will be voted on at the Company’s Annual
Meeting of Stockholders scheduled for June 15, 2017.
“We are very pleased to have signed the Purchase Agreement with
Whitebox. Over the past year, we have been working hard to
restructure our balance sheet and put ourselves in a stronger
financial position that would enable us to move ahead with our
strategic initiatives. Resolving our debt situation with Whitebox
was paramount to this effort. Over the past year, we have been able
to strengthen our cash position while significantly decreasing the
principal balance of our 2022 Notes, which gave us the flexibility
to work with Whitebox and generate a solution that we believe will
benefit all of Gevo’s stakeholders and give ourselves more runway
to complete our goals, namely to continue to execute our growth
plan of building out our Luverne plant to serve Gevo's core jet
fuel, renewable gasoline and isobutanol markets,” said Dr. Patrick
Gruber, Gevo’s Chief Executive Officer.
“With clarity on our balance sheet, we believe we will be in an
improved position to develop key customer relationships and
negotiate better deals for Gevo and our stockholders. I want to be
clear that we still need to explore financing options to expand
Luverne, but we expect this new capital structure to provide us
with additional flexibility that we did not have previously. We
continue to look to 2017 as a pivotal year for Gevo and remain
excited about the opportunity in front of us,” Mr. Gruber
continued.
A Current Report on Form 8-K will be filed today with the U.S.
Securities and Exchange Commission that will contain a more
detailed description of the terms of the Purchase Agreement, the
Exchange and the 2020 Notes and will include a copy of the Purchase
Agreement and the form of indenture pursuant to which the 2020
Notes would be issued.
About Gevo
Gevo is a leading renewable technology, chemical products, and
next generation biofuels company. Gevo has developed proprietary
technology that uses a combination of synthetic biology, metabolic
engineering, chemistry and chemical engineering to focus primarily
on the production of isobutanol, as well as related products from
renewable feedstocks. Gevo’s strategy is to commercialize bio-based
alternatives to petroleum-based products to allow for the
optimization of fermentation facilities’ assets, with the ultimate
goal of maximizing cash flows from the operation of those assets.
Gevo produces isobutanol, ethanol and high-value animal feed at its
fermentation plant in Luverne, Minnesota. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based economy that
meets society’s needs for plentiful food and clean air and
water.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which include statements relating to the Exchange, the
Purchase Agreement, the 2020 Notes, whether Gevo’s stockholders
will approve the Exchange and the 2020 Notes and whether the
transactions contemplated by the Purchase Agreement will be
completed, are made on the basis of the current beliefs,
expectations and assumptions of the management of Gevo and are
subject to significant risks and uncertainty. Investors are
cautioned not to place undue reliance on any such forward-looking
statements. All such forward-looking statements speak only as of
the date they are made, and Gevo undertakes no obligation to update
or revise these statements, whether as a result of new information,
future events or otherwise. Although Gevo believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements involve many risks and uncertainties
that may cause actual results to differ materially from what may be
expressed or implied in these forward-looking statements. For a
further discussion of risks and uncertainties that could cause
actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of Gevo in general, see the risk disclosures in the Annual
Report on Form 10-K of Gevo for the year ended December 31, 2016,
and in subsequent reports on Forms 10-Q and 8-K and other filings
made with the U.S. Securities and Exchange Commission by Gevo.
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
EnergyTech Investor, LLC
+1 415-233-7094
gevo@energytechinvestor.com
@ShawnEnergyTech
www.energytechinvestor.com
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