Assets of Fulcrum Sierra Biofuels, Fulcrum BioEnergy to be sold via bankruptcy auction
Fulcrum BioEnergy in 2022 announced production had commenced at its Sierra Biofuels plant near Reno, Nevada. / SOURCE: Fulcrum BioEnergy
September 19, 2024
BY Erin Voegele
Less than two weeks after Fulcrum BioEnergy Inc. and affiliated companies filed for Chapter 11 bankruptcy protection, the assets of Fulcrum Sierra Biofuels LLC and Fulcrum Bioenergy Inc. are being offered for sale at auction. Switch Ltd. has submitted a stalking horse bid of $15 million for the assets of Fulcrum Biofuels, plus the assumption of certain liabilities.
Fulcrum BioEnergy, a waste-to-energy company, was founded in 2007. The company’s proprietary process combines gasification and Fischer-Tropsch technologies to convert organic landfill waste into liquid fuel. Fulcrum initially planned to convert municipal solid waste (MSW) into ethanol, but later pivoted to the production of sustainable aviation fuel (SAF) and renewable diesel.
The company broke ground on its 11 MMgy Sierra Biofuels plant in 2016. The facility is located near Reno, Nevada. Construction on the project was complete in mid-2021 and Fulcrum BioEnergy announced in May 2022 that the plant had begun operations. The biorefinery conducted initial operations in late 2023 producing approximately 6,000 gallons of fuel.
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Development Specialists Inc., the company marketing the Fulcrum assets for sale, said that following a maintenance outage to replace, modify and repair certain equipment, the plant is nearly ready for start-up operations. Prospective bidders could look to complete the outage work and operate the facility as designed and constructed, or look to retrofit with preferred technology, the company said in a statement announcing the auction.
In court filings, Fulcrum said despite the company’s successful proof of concept at the Sierra plant and substantial progress with ongoing research and development, it has faced significant liquidity issues in recent years. Following enforcement actions by creditors over the past year, Fulcrum said it was forced to cease operations at the Sierra Plant in May 2024.
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According to documents filed with the court, an initial marketing process initiated earlier this year identified 36 potential purchasers for the Sierra Biofuels plant. Of those 36 parties, six submitted non-binding letters of intent (LOI), three of which were liquidation offers. The LOI from Switch Ltd. was the highest value contemplated for the purchase of Fulcrum’s assets, ultimately resulting in a stalking horse bid of $15 million. That bid will set the floor for an upcoming competitive bidding process.
The assets included in the stalking horse bid include the Sierra Biofuels facility, which currently has the capacity to produce 11 MMgy of synthetic crude oil. The facility is located on 19.4 acres, roughly 20 miles east of Reno. The bid also includes a feedstock processing facility situated on 10 acres located 10 miles east of Reno. In addition, the bid includes rights to a NV Energy high-voltage distribution agreement, providing 25 megawatts (MW) of total power delivery, and rights to a water supply agreement for 155 acre-feet per year. Other assets encompass tangible assets (PP&E and inventory), permits and licenses, causes of action related to Fulcrum Biofuels and all associated security deposits.
According to Development Specialists, Fulcrum Bioenergy Inc. is offering expanded assets for bidding, which are not included in the stalking horse bid. These expanded assets include 14 U.S. patents, five pending U.S. patent applications, 26 international patents, and over 30 pending international patent applications. Fulcrum BioEnergy also has equity in U.K. subsidiaries that are currently in the design stages of development.
The bid deadline is set for Oct. 25, with the auction scheduled to be held Nov. 1.
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