Global Bioenergies: €20m Capital Raise To Fund Second Phase Of Pilot

Capital raising launched for industrial pilot
Global Bioenergies (GBE) has announced funding for the two stages of industrial pilot testing of its proprietary process for producing isobutene from renewable sources. On top of a proposed €20m capital increase it will receive €4m from French state sources, out of a €5.2m package, in alliance with Arkema and the Centre National de la Recherche Scientifique (CNRS). The capital increase will cover the remaining cost of the first pilot, plus the estimated €15m capex requirement for the second pilot. Management is currently exploring prospective sites and industrial partners for the second pilot, with more details expected to be announced in H114.

State funding for the first industrial pilot
GBE has announced that the industrial pilot for its isobutene process will be partly funded by €5.2m of state funding under the Investissements d’Avenir programme managed by the Commissariat General a l’Investissement. GBE will receive €4m of the total state funding over three years, a third of which will be in the form of subsidies, two-thirds as loans. The industrial pilot phase is due to start in July, after the success of laboratory testing, during which the performance of the process has been improved and a larger lab pilot installed to start the industrialisation phase.

€20m capital raise to fund second phase of pilot
GBE has launched a proposed €20m capital increase, running from 27 June to 9 July, priced at €24.8, a 19% discount to the last month’s weighted average price. This could be increased by 15% to €23m if there is demand. The offer has already received confirmed subscriptions of €13m from new and existing investors, including four private equity entities of a French bank, which are dedicated to innovative companies. The offer is open to institutional and French retail investors.

Valuation: Our valuation range remains €58-85m
This development does not change our €69m mid-point valuation within a €58-85m range, which is based on a DCF, using the isobutene process as a proxy for the value of the whole company and excluding the processes for the other olefins, as they are at a much earlier stage of development. Our range incorporates a variety of sensitivities and probability adjusted cash flows around a base case discount rate of 16%. We have not focused on relative valuations, as there are no direct comparative companies and traditional valuation metrics are not particularly useful, given GBE’s current lack of profitability.

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