Biofuels start-up on $A27m Mission

A NEW biofuels player plans to raise $A27 million via an initial public offering and proceeds will be used to build a refinery in Malaysia, which is scheduled to start producing palm oil-based biodiesel by October.
Biofuels start-up on $A27m Mission Biofuels start-up on $A27m Mission Biofuels start-up on $A27m Mission Biofuels start-up on $A27m Mission Biofuels start-up on $A27m Mission

The West Australian newspaper reported yesterday that Mission Biofuel’s $27.5 million plant was expected to produce 100,000 tonnes of biodiesel per year.

According to the company’s prospectus, Mission would have a cost advantage of about $400 per tonne over its European competitors, thanks to Malaysia’s lower labour and land costs and its abundant supply of cheap palm oil.

The company has forecast a net profit for fiscal 2007-08 of $27.7 million on revenue of $73.4 million, based on nine months of production at 80% capacity.

Headed by Perth-based Nathan Mahalingam, Mission has already secured long-term feedstock and off-take agreements, located a plant site at Kuantan port and signed a construction contract with a US builder.

Mahalingam will become the biggest individual shareholder, with 24.6 million shares at the float price. In addition, the company has secured $13.6 million in cornerstone funding from major US investment bank, Tiger Fund, which will hold a 17.6% stake.

Mission aims to raise $27 million at $1 per share, with new shareholders holding a 29.7% stake in the company. Founding and seed shareholders, including Mahalingam, would control 52% of the company.

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