Amyris Financing Round is a Royal Success
Maxxwell A.R. is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On Monday Amyris, Inc. (NASDAQ: AMRS) announced that it had secured $83.7 million in financing. The move came on the heels of a setback the company encountered while scaling its farnesene production process. During a conference call with investors on February 10th, CEO John Melo dropped a bomb when he unveiled the company would suspend construction at an Antibioticos facility in Spain to focus on quality of process in Brazil. This all but ensures commercial production targets for Amyris will be pushed back at least one year from 2014 to 2015.
What does it mean?
The $83.7 million in financing provides Amyris with the capital needed to overcome the hiccups encountered earlier this month. The financing consists of a $58.7 million private placement of its common stock to entities such as Temasek Holdings, Total Gas & Power USA, SAS, and Naxyris SA (an affiliate of NAXOS Capital Partners), as well as new investors Biolding Investment SA and a $25 million offering of senior notes.
Of particular interest to current or prospective Amyris shareholders is the investment from Biolding Investment SA, which is owned by His Highness Sheikh Abdullah of Qatar. It is always great to generate interest from investors with deep pockets and Biolding offers just that. In fact, upon meeting certain criterion at their Paraíso Bioenergia SA production plant in Brazil by March 31, 2013 Amyris will be granted an additional $15 million investment from His Highness. This would push the total financing to $98.7 million.
Amyris granted shares of common stock at $5.78 per unit, which represented the closing price of shares on February 22nd. The senior notes, due by 2017, are convertible at a price of $7.0682.
Investors should take note of the relative ease Amyris had in raising financing. The heightened interest in the beaten-down company is also quite impressive. Should the company continue to make progress the senior note price of just over $7 will be a steal by the time 2017 rolls around. Although 2011 financial results missed Wall Street "expectations" there is certainly upside to Amyris shares. It may be a good time to add to or start a long term position.
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