Would-Be Biofuel IPO Declares Bankruptcy

by: Greentech Media

By Jeff St. John

Changing World Technologies has gone from floating the possibility of an IPO to filing for bankruptcy in little more than a month’s time.

The West Hemppstead, N.Y.-based biofuel maker filed for bankruptcy protection on Wednesday, saying it had faced the threat of running out of cash at the end of March and would lay off most of its staff, including 50 workers at its biofuel plant in Carthage, Mo.

Changing World raised eyebrows in January when it declared it was ready to go public through an unusual “OpenIPO” auction process. After all, the credit crisis and economic downturn drove down the number of IPOs in 2008 to their lowest level since 1978, according to Renaissance Capital.

Companies canceling plans to go public included several biofuel makers, like Redwood City, Calif.-based Codexis, Iowa-based biodiesel producer Renewable Energy Group and Seattle-based Imperium Renewables (see Codexis Says No to IPO and Imperium IPO Delay Underlines Feedstock Shortage, Analyst Says).

Changing World isn’t the only biofuel maker to seek bankruptcy protection. VeraSun Energy Corp. (OTC:VSUNQ), which claimed to be the largest ethanol producer in the world, filed for bankruptcy in October, after making bad bets on corn price hedging contracts in the midst of falling corn prices.