The NYSE IPO of Brazilian ethanol and sugar maker Cosan (CZZ) had us wondering if the future is bleak for other biofuel IPOs. The company raised about half of the originally planned $2 billion, notes Reuters.
The reduced offering, according to Bloomberg, was a result of declining sugar prices and investor concerns over the company’s corporate governance — not a reflection of confidence in either the biofuel industry or the IPO market overall.
The venture community doesn’t seem phased by the IPO. We touched base with @Ventures principal Rob Day via e-mail and asked if he was worried about future biofuel IPOs, in light of Cosan’s IPO pricing.
“The company seems to be very project-oriented instead of tech-oriented, so I don’t think it has much bearing on the VC world. Certainly most VCs that I know who are investing in biofuels are investing in nextgen tech development and not now-gen project development.” – Rob Day
Seeking Alpha points out the stats: Cosan is the largest ethanol producer in Brazil and the second largest in the world, having produced 326.7 million gallons in fiscal year 2007 and 241.7 million gallons in 2006.
Cosan stocks were trading at $10.64 in mid-day trading today, up 1.3% from yesterday’s close of $10.50.