Imperium Renewables delays IPO plans

Biodiesel manufacturer Imperium Renewables has withdrawn its plans to go public, citing "unfavorable market conditions."

The Seattle-based company filed the paperwork with the Securities and Exchange Commission on Thursday. It had filed to go public in May, and had plans to raise $345 million.

The news comes a few weeks after the company replaced its then-CEO, Martin Tobias, naming President John Plaza as interim CEO and investor Nancy Floyd as chairman.

Imperium Renewables said that Tobias' departure was part of a planned transition, but company watchers noted that his leaving was abrupt and not well publicized. (The company issued a release at the end of the day on the Friday before Christmas.)

As reported earlier, rumors had been circulating that the IPO might be postponed.

Despite the tumult, Imperium Renewables has been one of the most successful biodiesel companies, having raised over $200 million. It is operating a plant at Grays Harbor, Washington, which is operating at full capacity producing 100 million gallons per year. It also has plans to make biodiesel from plants other than soy, including algae and jatropha.

But the overall biofuels market is experiencing signs of over-capacity, which could lead to a broader shakeout.

Ethanol, in particular, has seen what many consider an overinvestment in production. VeraSun, which produces ethanol from corn, last fall, canceled construction of a planned refinery.

Meanwhile, boosted biofuels production is one of the central planks of the recently passed Energy Independence and Security Act of 2007. Ethanol is used primarily as an additive to gasoline, though a higher concentration called E85 can be used in so-called Flex-fuel cars. Distributors sell both pure and blended biodiesel.

The federal government mandated 36 billion gallons of domestically grown biofuels production per year by 2022.

Government incentives and investor interest in alternative fuels have pushed up the price of basic commodities like corn and soybeans, which cuts into the margins of biofuels producers.