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GEVO: The Changing Government Landscape and Recently Accomplished Milestones


The alphaDIRECT Insight

With the new Administration in D.C. there have been some notable changes in the federal government’s view on biofuels and chemicals, which has led to greater uncertainty in the industry and negatively impacted many of the BioEconomy stocks. However, we believe there has been an overreaction in many cases as companies such as Gevo should have viable economic models without government subsidies or mandates and are also not dependent on government loans. We expect most of the private sector will continue with their efforts to reduce their carbon footprint and will not be deterred by short-term government actions. Gevo shares have been particularly hard hit in the aftermath and in this update, we are taking a look at how this policy shift relates to Gevo and the markets for biobutanol. Furthermore, the company has recently accomplished some key milestones including the exchange of most of their unsecured 2022 converts and restructuring the Whitebox debt as well as executing a binding off-take agreement with Haltermann Carless. These are critical steps in enabling the company to execute on its strategic plan to further develop key markets such as aviation and be in a position to expand production at the Luverne plant to full commercial scale once they achieve off take agreements totaling at least 50% of the plant’s proposed capacity