Gevo Tightens Belt, Plans to Push Forward with Project Funding Amid COVID-19 Layoffs
March 31 2020 - 9:00AM
Gevo, Inc. (NASDAQ: GEVO) announced today that due to the impact
the COVID-19 virus has had on the economy and Gevo’s industry, Gevo
has suspended production operations at its production facility in
Luverne, Minnesota (the “Luverne Facility”) for the foreseeable
future. In connection with the suspension of operations and the
overall economic disruption caused by COVID-19, Gevo also made the
difficult decision to terminate 30 employees, cutting across
Agri-Energy’s operations at the Luverne Facility and Gevo’s
headquarters in Colorado. The remaining employees that earn above a
certain dollar threshold, including senior executives, have agreed
to take a 20% salary reduction over the next three months, with the
20% portion to be paid in stock. With these steps, Gevo expects to
save several million dollars of cash burn during 2020.
Gevo expects to continue the production of renewable isooctane
and sustainable aviation fuel from the plant in Silsbee, Texas.
Additionally, Gevo intends to continue developing its hydrocarbon
business, including the planned expansion of the Luverne Facility,
and will continue to move forward in securing the project funding
needed to expand the Luverne Facility. The expansion is designed to
allow Gevo to produce large quantities of low carbon isobutanol,
sustainable aviation fuel and renewable isooctane.
Gevo also expects to continue engineering efforts for the
expansion of isobutanol production and the construction of a
commercial renewable hydrocarbon production facility, as well as
additional decarbonization projects at the Luverne Facility.
Furthermore, Gevo plans on continuing the development of its biogas
projects in Northern Iowa, ensuring it is available for the plant
expansion.
“The COVID-19 impact on ethanol prices gives a clear view that
in the near term we, unfortunately, needed to lay off employees.
This was an extremely hard decision, but these steps will provide
us with additional runway and optionality without losing focus on
what makes Gevo unique, namely our technology and business
systems,” said Patrick Gruber, CEO. “We are going all-in on pushing
to secure the funds for the buildout of Luverne, and we expect a
second site to produce the quantity of gallons we already have and
expect to have under contract for delivery in the 2023/24
timeframe. Contract negotiations for large quantities of
hydrocarbons are continuing to move forward. This tells us that
customers are looking past the current market disruption to the
future, where de-fossilized fuels would be in demand. We expect to
soon announce the hiring of a strategic advisor investment bank
that will help us raise money for our expansions at the project
level.”
About GevoGevo is commercializing the next
generation of jet fuel, gasoline and diesel fuel with the potential
to achieve zero carbon emissions and address the market need of
reducing greenhouse gas emissions with sustainable alternatives.
Gevo uses low-carbon renewable resource-based carbohydrates as raw
materials, and is in an advanced state of developing renewable
electricity and renewable natural gas for use in production
processes. As a result, Gevo is able to produce low-carbon fuels
with substantially reduced carbon intensity (as measured by the
level of greenhouse gas emissions compared to standard petroleum
fossil-based fuels across their lifecycle). Gevo’s products perform
as well or better than traditional fossil-based fuels in
infrastructure and engines, but with substantially reduced
greenhouse gas emissions. In addition to addressing the
environmental problems of fossil-based carbon fuels, Gevo’s
technology also enables certain plastics, such as polyester, to be
made with more sustainable ingredients. Gevo’s ability to penetrate
the growing low-carbon fuels market depends on the price of oil and
the value of abating carbon emissions that would otherwise increase
greenhouse gas emissions. Gevo believes that its proven, patented,
technology that enables the use of a variety of low-carbon
sustainable feedstocks to produce price-competitive, low carbon
products, such as jet fuel, gasoline components like isooctane and
isobutanol and diesel fuel, yields the potential to generate
project and corporate returns that justify the build-out of a
multi-billion dollar business. Learn more at our
website: www.gevo.com
Forward-Looking StatementsCertain 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 relate to a variety of
matters, including, without limitation, statements related to
Gevo’s cash burn, Gevo’s plans to resume hydrocarbon production at
the Silsbee, Texas facility, Gevo’s ability to successfully finance
and complete the expansion of the Luverne Facility and any
additional facilities at the scale and on the timing anticipated or
at all, Gevo’s ability to successfully execute on its
decarbonization projects, Gevo’s ability to enter into additional
supply agreements for its hydrocarbon products, Gevo’s plans to
hire a strategic advisor and other statements that are not purely
statements of historical fact. These forward-looking statements 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, 2019 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.
Investor and Media ContactShawn M. SeversonIntegra Investor
Relations+1 415-226-7747info@integra-ir.com
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