Aventine Renewable Energy Holdings Inc., the nation’s fourth-largest ethanol producer, raised $389.5 million in an initial public offering Wednesday, surpassing the amount it expected.
The Pekin, Ill.-based company and stockholders sold 9.06 million shares, 1 million more than forecast in a regulatory filing, at $43 each, according to bankers involved in the sale.
The shares priced at the high end of its $40 to $43 range, which it increased Wednesday from the $37 to $41 target the company forecast in a June 13 regulatory filing.
Aventine’s public offering is the second this year by a U.S. ethanol producer as demand rises for the grain-based fuel as a gasoline component.
“There’s a lot of excitement now in this industry,” said Randy Stratton, publisher of Sioux Falls, S.D.-based Biofuelsmarketplace.com and a consultant for the ethanol industry. “Ethanol producers want to ramp up quickly. You can use the capital market, the money you’re going to raise through the IPO, for very aggressive expansion.”
Demand for ethanol, a form of alcohol derived from grain or sugar, has also soared as U.S. gasoline refiners use it to replace MTBE, an additive that at least 28 states blame for polluting groundwater. In addition, the Energy Policy Act signed by President Bush in August requires refiners to almost double ethanol use by 2012, to 7.5 billion gallons a year.
