Changing World Technologies - Chapter 11

[Pat McCotter]

Biodiesel from turkey company Changing World Technologies files IPO
Posted Aug 17th 2008 at 12:39PM by Domenick Yoney

It seems that Changing World Technologies have finally solved the offal odor pollution problem at their turkey byproducts to biodiesel plant and are ready to begin bigger and better things. The company, which uses a thermal conversion process (TCP) to break down waste into fuel and organic fertilizer, wants to raise $100 million to fund an expansion and has filed an S1 with the U.S. Securities and Exchange Commission to begin the process. The allocation and price of shares in the IPO will be decided by an auction process handled by the offering underwriter, WR Hambrecht & Co, as well as other securities dealers. The company currently produces between 4 to 9 million gallons of biodiesel a year and could reach 54 million gallons a year with the expansion. Although it is currently selling its fuel to industrial boilers, it has been approved by the EPA for use a an additive in diesel. It will have to be improved somewhat to be considered for full use as a transportation fuel.

[William]

"we believe that our cash production cost of renewable diesel will be in the range of $1.25 to $1.50 per gallon depending on the size of the production facility. Giving effect to the $1.00 per gallon renewable diesel mixture tax credit that we receive from the U.S. government for each gallon of renewable diesel produced at our facilities that we sell in the United States, we expect that our net cash costs will be in the range of $0.25 to $0.50 per gallon. Using the current feedstock mix at our Carthage facility, for every gallon of renewable diesel we produce, we produce approximately one gallon of liquid nitrogen concentrate fertilizer, and approximately three pounds of solid mineral phosphate fertilizer. "

You're right. That subsidy pisses me off. It's obvious they can turn a huge profit without it. Not that it would be justified if they couldn't but WTF.

[Lloyd Danforth]

I'm in a couple bio-diesel forums.  I stopped bothering with them because the subjects were either subsidies, laws concerning production(they talked about obeying them ), and, of course many of them were looking for investors in 500,000 gallon per X(?)
production facilities. If these forums could be believed, there are dozens of these facilities coming online soon

[Pat McCotter]

CWT is not a "biodiesel" plant that makes fuel from veg oil but...You could have your own biodiesel plant in Cheshire, CT.
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New Biodiesel Plant In Cheshire On Auction Block
By LYNN DOAN
Courant Staff Writer
August 9, 2008

A brand new biodiesel plant sits in Cheshire, almost ready for service, and it's for sale.

The price: "Whatever anyone will pay for it."

This 7,500-square-foot web of pipes and unfilled tanks, centrally located in the state, might seem a hot property at a time when homeowners face the ugly prospect of $5-a-gallon heating oil this winter. Biodiesel — which converts vegetable oil and animal fat into fuel for heating systems and diesel engines — has been a much ballyhooed technology in recent years.

For now, the plant isn't fueling anything but speculation over what its selling price will be at an upcoming auction. It is the single largest asset of F&S Oil Co. — a Waterbury-based heating oil company that closed abruptly, stiffing thousands of residents who had long-term contracts.

Hype around the plant is not wanting, since the company owes an estimated $7.7 million in civil penalties and restitution, and the cleaner-burning fuel plant could provide the bulk of that relief. The court-appointed lawyer overseeing the sale estimated that 30 businesses have expressed an interest.

But the complex could end up being a tough sell, especially since the economics of biodiesel can be cloudy, like the old oils used in the process.

"We're looking at a smaller facility, incomplete, never been tested. We've sold a lot of alternative energy equipment. But one in Cheshire? That produces five million gallons? In a 7,500-square-foot building? I just can't tell you where it will go," said Thomas J. Gagliardi Jr., whose industrial auction firm, Guilford-based Thomas Industries, is running the sale. "There's just nothing that's comparable to it."

A Resonating Collapse
The drama behind F&S has fanned the interest in the biodiesel plant on Sandbank Road, expected to be auctioned off in September. When the company, owned by Richard Stevens, collapsed in March, it reneged on promises to deliver millions of gallons of fuel oil to an estimated 3,500 customers who had already paid for it.

The controversy heightened two weeks after the collapse, when Gov. M. Jodi Rell withdrew her nominee to lead the state's high-tech venture capital agency. Edward M. Bowman Jr., named by Attorney General Richard Blumenthal as "a person of interest" in his investigation of the F&S closing, had been serving as chairman of Connecticut Innovations Inc. as he awaited confirmation by the General Assembly.

Bowman had sold his family-owned heating oil company to F&S in 2004, but agreed to do occasional consulting work for the company. A state grant application lists him as part of the management team for the biodiesel plant, but Bowman said he stopped working on the project last summer when he joined Connecticut Innovations.

The demise of F&S also prompted state legislators to enact a law protecting consumers from losing prepaid heating oil deposits made when they lock in prices before winter. Rell has proposed a measure that would require heating oil dealers to report to the state Department of Consumer Protection on their prepaid contracts.

Exactly how F&S collapsed remains unclear. Court-appointed receiver Carlton E. Helming, who was charged with investigating the company's closing and securing its assets, said in a court statement that he "faced and managed chaos" in the weeks after his appointment.

Among his challenges: computers with key financial information allegedly stolen in a robbery days after the company shut down; allegations of backroom dealings by some former company executives; and an extensive list of creditors still owed money, according to court files.

"I had no choice but to acquiesce to the overwhelming evidence that this company lacked the necessary financial partners to make another go of it," Helming said in a court report.

'Beautiful Prototype'
The biodiesel plant marks the third auction of F&S property that Helming has organized. The first two — consisting of company real estate in Waterbury and Thomaston, customer lists, trucks and other equipment — brought in $2.8 million. Helming is hoping the biodiesel plant, in which the company invested at least $4 million, will rake in the largest sum.

"Everyone's excited about it. It's a beautiful prototype facility," said Helming, who added that the roughly 30 businesses that have expressed interest in the plant range from oil distributors and biodiesel plant owners to investors such as international hedge funds.

But Helming hasn't put a price tag on the complex, saying only that it's worth "whatever anyone will pay for it."

F&S came to Cheshire officials with plans to turn its distribution center into a biodiesel production facility about a year ago, according to town planner Bill Voelker. But company officials had only gotten so far as to introduce the concept in a "back-of-the-napkin" way, he said.

Planning and zoning permits to operate the plant would have been fairly simple to obtain, Voelker said. The company was converting the facility and hadn't yet sought permits, he added, when "all of a sudden, the thing went south."

"The whole concept is a good concept," Voelker said. "It sounded like these were just local guys who wanted to manufacture this stuff here."

Proposals for biodiesel plants have been popping up around the state, driven by a rapid increase in fossil fuel prices. The largest proposal so far was for a production plant in Suffield that would have made 50 million gallons of biodiesel fuel a year, but those plans were rejected by town zoning officials.

Biodiesel plants have faced difficulty recently because of the rising cost of buying and transporting the raw oils and fats, and because refining requires large amounts of energy.

The Cheshire plant, which would produce between four million and eight million gallons a year, pales in comparison to a typical facility. But it could still bring in a profit, said Amber Pearson, spokeswoman for the National Biodiesel Board, a trade association.

"You can find a lot of plants around that size now," she said.

And some companies are turning to cheaper ingredients that could widen their profit margins, she said.

Whether it's the potential profits or the tangled story behind F&S, the biodiesel plant has attracted much "through-the-grapevine hype," Gagliardi said.

"But the litmus is: do we actually have someone interested in this facility?" he said. "If you were to walk through the plant, what you're going to see is a half-dozen tanks, some sophisticated units, a generator, but it's just that — just standardized units.

"It's not that I'm diminished in my positive attitude," he said. "It's just that we have something on our hands that's totally different."

[Lloyd Danforth]

I wonder if the one in Suffield is going to open

[Pat McCotter]

Looks like a few NIMBY's in town there.

We want cheaper, cleaner fuel but don't you dare put a plant here and mitigate our property taxes!

[Pat McCotter]

Biofuel Maker Changing World Files For Bankruptcy
Written by Josie Garthwaite
Posted March 5th, 2009

A dig through biofuel maker Changing World Technologies' SEC filings earlier this week (prompted by a report from southwest Missouri's Carthage Press) revealed the signs of a company teetering on the brink. Yesterday CWT confirmed our take on the company's dire situation, announcing late in the afternoon that it has filed for Chapter 11 bankruptcy protection.

Plenty of biofuel developers have gone under in recent months, many of them having locked in high corn prices and gotten squeezed by plummeting fuel prices. But unlike the corn-based ethanol producers that have dominated the industry trend, CWT ranks among the so-called next generation biofuel companies, which use non-food biomass for fuel. CWT uses agricultural waste, including poultry remains. For now, cellulosic ethanol players seem to be faring better on the road to commercialization.

The company cited "a variety of factors, including escalating expenses associated with commercializing its patented waste conversion process," looming debt obligations and unsuccessful attempts to obtain outside financing. The West Hempstead, NY-based company had planned to go public, but withdrew its filing last month due to market conditions, according to underwriter WR Hambrecht.

The next step for CWT is reorganization. The company, which reportedly shuttered its sole production facility (a biorefinery in Carthage, Mo.) this week, said it has laid off the majority of its workers. It now plans to fund expansion through new debt and equity financing.

While the Carthage plant has drawn frequent complaints from local residents for its foul odors, CWT expects its technology to rise again in "communities seeking to maintain a source of well compensated employment, to reduce waste, and produce renewable energy while helping to reduce greenhouse gas emissions."