The Situation

Following a significant downturn in the ethanol industry, a leading producer and marketer of biofuels engaged Alliance Advisors Investor Relations upon bringing its ethanol plant subsidiary out of bankruptcy. At the time, it owned just 25% of the plant subsidiary with various lenders holding the remaining interest and had idled two of its four ethanol plants due to negative industry conditions and a troubled balance sheet. The company also had no analyst coverage and just 9% institutional ownership.

Solution

We implemented a comprehensive and customized IR program including strategic counsel, messaging and outreach functions.

• Refreshed company messaging including all collateral materials (presentation, fact sheet, website).
• Established strong news flow to feature progress in revenue diversification, operating efficiencies and balance sheet improvements.
• Enacted an aggressive outreach program punctuated by investor conferences and non-deal roadshows.
• Focused targeting: first special situation, followed by alternative energy and micro-cap growth.
• Embarked on a sell-side outreach campaign to build awareness of the company among target analysts.

Results

The comprehensive investor relations effort demonstrated strong progress in many areas. The company garnered research coverage from four investment banks with a strong pipeline of additional research analysts considering/in the process of initiating coverage. For the March 31, 2015 period, the company reported 86% institutional ownership. In June, the company established a 100% ownership interest in its plant subsidiary and paid down $62 million in debt in 2014 alone. The company also restarted production at both idled facilities, bringing all 200 million gallons of combined annual production online, and it established strong cash flows with a cash position of $42 million at March 31, 2015. Furthermore, on July 1, the company completed a merger with another ethanol producer, more than doubling its annual production and marketing capacity.