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Verenium: Biofuels Plant On Track Despite Financial Report

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By JIM KONKOLY

Highlands Today

Published: March 18, 2009

SEBRING - A top executive with Verenium Corp. said Tuesday that plans are going forward to build a $300-million biofuels plant in Highlands County.

"Absolutely, we are working on it as we speak," Gerry Haines, executive vice president of the Massachusetts-based company, said, when asked if he expects the plant to be under construction next year and in production in 2011.

In January, Verenium announced plans to break ground for the country's first cellulosic ethanol plant on the Lykes Brothers ranch off State Road 70.

Tuesday, Haines was responding to wire service stories reporting that the company said, in a year-end filing with the Securities and Exchange Commission, that it may have to "curtail or cease operations" if it could not raise additional capital.

"We continue to experience losses from operations, and we may not be able to fund our operations and continue as a going concern," the company said in its annual year-end report to the SEC.

However, the company also said it believes it will be able to raise additional cash through corporate partnerships and collaborations, federal and state grants, loan guarantees, and other means.
Haines said the statements in the report to the SEC are common in start-up companies like Verenium, and he does not doubt that the Highlands County biofuels plant will be built.

"This is very common in earlier-stage or developing companies who are raising capital and spending significant amounts of capital, as we have been doing for the past three years," Haines said. The same statement about the company's need to raise capital has been included in its fillings with the SEC for each of the last three years, he said.

About the company's disclosure that it needs to raise more capital, Haines said, "it has no effect on any of our plans for development in the future..."

The proposed Highlands County plant would produce 36 million gallons of ethanol per year from renewable, non-food grass crops and create about 140 full-time jobs, Tim Eves, vice president for commercial development, said at that time.

In February, British Petroleum (BP) announced that it had become a partner in Verenium's biofuels project in Highlands County.

"We remain committed to the project," Ronnie Chappell, a BP spokesman, said Tuesday.
Haines added that the company is "still deeply involved with a partnership with BP (British Petroleum) to go forward as previously announced."

"And, indeed, that venture (in Highlands County) is very active," he added.

County Commissioner Don Bates said he was not sure what the wire reports mean for Verenium's project in Highlands County.

"Hopefully," he added, "they'll be able to pull out of their problems and continue with their plans."

In mid-January, Bates was with Verenium officials in Tallahassee, when the Florida Department of Agriculture awarded a $7 million "farm-to-fuels" grant to Verenium for construction of its biofuels plant in Highlands County.

The state provided a total economic incentive package of about $15 million for the plant, and that was a major reason the Massachusetts-based Verenium decided to build it here, Eves said at that time.

An Associated Press story Tuesday added that an independent audit of Verenium by Ernst & Young said the company's operating plan and existing working capital deficit raise doubt about its ability to continue.

Dan Murphy, executive director of the Highlands County Industrial Development Authority/Economic Development Commission, said he would not assume Verenium's biofuels plant here has been derailed because of news reports that it has to raise additional capital.

"I would not necessarily jump to any conclusions because many of these biofuels companies are in the start-up phase of development and seeking capitalization," he said.

Highlands Today reporter Jim Konkoly can be reached at 863-386-5855 or e-mail jkonkoly@highlandstoday.com

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