RPT-Iowa Venture Capitalist Sours On Ethanol
Reuters UK:
A venture capitalist in Iowa has scrapped plans to consolidate several farmer-owned ethanol plants amid a dramatic drop in profits throughout the industry, said one of his executives on Wednesday.
“We’ve concluded that in the current environment, the economics of each plant are so uncertain that it’s going to very difficult to value them and we won’t be successful with our plan,” said David Miles, chief executive of Countryside Renewable Energy, which was formed in 2006 by investor John Pappajohn.
Initially, Countryside had wanted to buy at least six ethanol plants using $500 million in debt financing and $300 million from an initial public stock offering. The plants had a combined production capacity of about 300 million gallons, Miles said.
Countryside dropped that plan some time ago and instead focused on buying two ethanol plants, with possible additions or an IPO in the future.
Countryside will close permanently at the end of the month.
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