[Biodiesel News] Axiom opens $36m IPO, scores Linfox deal

Axiom opens $36m IPO, scores Linfox deal

The Age - Melbourne,Victoria,Australia

... fuel company Axiom Energy Ltd has opened a $36 million initial public offering (IPO) and scored an all-important trial arrangement of its biodiesel fuels with ...

 

Renewable fuel company Axiom Energy Ltd has opened a $36 million initial public offering (IPO) and scored an all-important trial arrangement of its biodiesel fuels with trucking giant Linfox.

 

Axiom makes biodiesel fuels by blending renewable plant extracts and animal fats with ordinary petrodiesel fuel.

 

The Melbourne based company intends to use the $36 million to fund its first production plant in Geelong, for which it has secured a 20-year lease with logistics firm Toll Holdings Ltd.

 

The plant can make up to 150 million litres of biodiesel a year, which Axiom will use to tap the 15 billion litre a year Australian diesel market.

 

Axiom technical director David Vinson said the company's biodiesel fuel is cheaper than ordinary diesel.

 

"We have forecast a discount to the terminal gate price of diesel fuel of 15 cents per litre," Mr Vinson said.

 

"So really we're giving customers two benefits, one of them savings in terms of fuel costs and the other an opportunity to cut greenhouse gas emissions."

 

Mr Vinson said Axiom's product was just as efficient as ordinary diesel and reduced particulate, or environmentally hostile "black smoke", emissions by 50 per cent.

 

He said the fuel was cheaper because producers whose biodiesel blend meets government specifications can access an exemption from the 38.143 cents per litre excise on diesel fuel.

 

The excise exemption will last until 2011 then progressively be reduced until 2015 when the excise is expected to drop to 19.1 cents per litre.

 

Mr Vinson said the biodiesel fuel market was also primed for expansion into the commercial realm, with passenger cars that run on diesel already appearing on Australian roads.

 

Holden for example has already released a diesel powered Astra - a small car - and more manufacturers are set to follow suit, Mr Vinson said.

 

Linfox, meanwhile, said the logistics industry needed to play a more active role in tackling carbon emissions.

 

"Linfox has shown great leadership, being the first major Australian trucking company to publicly announced the importance of biodiesel to its fuel strategy," Axiom chairman Danny Goldman said.

 

Axiom is offering about 51.5 million shares at 70 cents each in an attempt to raise the $36 million.

 

The company said it already had a strong pre-registration response to the IPO from the majority of previous applicants for its withdrawn $37.6 million IPO in 2005, which had been oversubscribed.

 

Axiom decided to pull that IPO after federal treasury said it was considering introducing an excise on diesel produced from waste plastics - a product Axiom intended to make in a secondary operation, since scrapped.

 

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Posted by Vince to Biodiesel News at 9/22/2006 06:00:00 AM