A dig through biofuel maker Changing World Technologies’ SEC filings earlier this week (prompted by a report from southwest Missouri’s Carthage Press) revealed the signs of a company teetering on the brink. Yesterday CWT confirmed our take on the company’s dire situation, announcing late in the afternoon that it has filed for Chapter 11 bankruptcy protection.
Plenty of biofuel developers have gone under in recent months, many of them having locked in high corn prices and gotten squeezed by plummeting fuel prices. But unlike the corn-based ethanol producers that have dominated the industry trend, CWT ranks among the so-called next generation biofuel companies, which use non-food biomass for fuel. CWT uses agricultural waste, including poultry remains. For now, cellulosic ethanol players seem to be faring better on the road to commercialization.
The company cited “a variety of factors, including escalating expenses associated with commercializing its patented waste conversion process,” looming debt obligations and unsuccessful attempts to obtain outside financing. The West Hempstead, NY-based company had planned to go public, but withdrew its filing last month due to market conditions, according to underwriter WR Hambrecht.
The next step for CWT is reorganization. The company, which reportedly shuttered its sole production facility (a biorefinery in Carthage, Mo.) this week, said it has laid off the majority of its workers. It now plans to fund expansion through new debt and equity financing.
While the Carthage plant has drawn frequent complaints from local residents for its foul odors, CWT expects its technology to rise again in “communities seeking to maintain a source of well compensated employment, to reduce waste, and produce renewable energy while helping to reduce greenhouse gas emissions.”