Aemetis signs terms of $100 million of construction, working capital debt financing
Aemetis Inc. announced Nov. 23 that it has signed a nonbinding term sheet and is working towards completing $100 million of new debt financing from Third Eye Capital of Toronto, Canada. The debt financing is expected to be comprised of $50 million for carbon reduction projects and $50 million for working capital.
Aemetis has repaid more than $55 million of its higher interest rate debt during 2021. The new, lower interest rate debt financing is expected to provide funding for the Aemetis initiatives that reduce the carbon intensity of renewable fuels, including sustainable aviation fuel (SAF), renewable diesel, carbon sequestration, and upgrades to the Keyes ethanol plant.
Cash and grants of more than $32 million have already been invested in the Phase I, 45-million-gallon-per-year, Carbon Zero SAF and renewable diesel plant in Riverbank, California. This new debt facility is expected to provide the remaining funding to the project from Aemetis prior to completion of additional project debt financing. A $125 million USDA 9003 Biorefinery Assistance Program guaranteed loan has been signed by Aemetis and an additional $100 million under the USDA Renewable Energy for America Program is in process.
The base interest rate for the $50 million carbon reduction project financing will be 8 percent per year. The base interest rate for the $50 million of working capital financing will be 10 percent per year. Both credit facilities are expected to have availability provisions based on the qualified use of funds and other factors. Additional consideration to the lender will include customary fees for 500,000 warrants at a $20 per share exercise price.
“This new financing builds on our successful relationship with Third Eye Capital, the company’s senior lender since our first funding in 2008,” said Eric McAfee, chairman and CEO of Aemetis. “We sincerely appreciate their ongoing support for carbon-reduction projects and operations at Aemetis. This lower interest rate debt supports the development of the 90-million-gallon-per-year Aemetis Carbon Zero sustainable aviation fuel and renewable diesel plant, but also fully funds the remaining Keyes plant upgrades to install solar and MVR, as well as the two characterization wells for the Aemetis Carbon Capture subsidiary to submit EPA Class VI CO2 sequestration licenses at our two biofuels plant sites.”
The closing of the new debt financing is subject to customary closing conditions. The commitments in respect of the new debt financing and the terms and conditions remain subject to the finalization and execution of definitive documentation.
Aemetis has signed a $1 billion, 250-million-gallon, 10-year supply agreement with Delta Air Lines to supply a blend of 40 percent SAF and 60 percent petroleum jet fuel to San Francisco Airport. The sustainable aviation fuel is expected to be produced by the Aemetis SAF and renewable diesel plant under development on a 125-acre former U.S. Army Ammunition production plant site in Riverbank, California.
Powered by 100 percent renewable electricity, the Aemetis Carbon Zero plant design utilizes cellulosic hydrogen made from carbon negative waste wood. The below-zero carbon intensity, cellulosic hydrogen then is used to hydrotreat vegetable or other renewable oils to produce SAF and renewable diesel fuel. The process technology is licensed from Axens (France), a global technology provider to the oil and chemical industries.
To further reduce carbon intensity, the Aemetis Carbon Zero production process includes injecting CO2 from the production plant into a sequestration well at the Riverbank plant site to permanently capture an estimated 200,000 metric tons per year of CO2.