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Posted on  

October 3, 2003

Ethanol plant closes in on funds goal

Times Business Writer

RENSSELAER -- Organizers of a proposed ethanol plant near here are about $12 million short of their goal and will move into a second phase of fund raising.

Iroquois Bio-Energy Co., headed by former area corn grower Michael Aylesworth, intends to build a plant for manufacture of the corn-based additive that allows fuel to burn cleaner.

A bill pending in Congress could boost the proposal's chance for success.

Iroquois needs at least $22 million in private investments to guarantee the almost $58 million needed to start up the plant on about 40 acres east of town.

The Securities Exchange Commission agreed last week to allow Iroquois to resume raising equity, Iroquois director John Bryant said.

Fund-raising ceased briefly while company directors amended terms of the initial drive, which expired Sept. 23, Bryant said.

Just over $4 million was raised earlier this year, much of it in small contributions of a few thousand dollars up to $500,000, Bryant said.

Many of the investors were local farmers, Aylesworth said.

Iroquois intends to hire a brokerage firm to help widen the circle of prospective investors, possibly to include some with deeper pockets, Bryant said.

"What we were trying to do was to get this locally based," Bryant said. "But it's just tough right now to get people to ante up this kind of money."

The plant would be the first in Northwest Indiana to produce the fuel additive.

The project has the support of Rep. Pete Visclosky, D-Ind., and Sen. Richard Lugar, R-Ind., who helped win $6 million in federal funding for start-up costs.

The federal energy bill now in conference committee could double the required use of ethanol in gasoline over the next decade, to 5 billion gallons yearly from about 2.4 billion gallons.

"We don't know whether it will be thumbs up or thumbs down," Ayleworth said. He hopes for an answer by the end of October.

Plans for the plant will continue regardless of whether the bill passes.

"It would make our jobs a little easier," said Aylesworth, who'd been a farmer most of his life and resigned in May as Porter County Republican chairman to become executive director of the Porter County Builders Association.

New terms of the equity drive allow investors to place 20 percent of their investment in an escrow account with a signed agreement to remit the remaining 80 percent at the close of the deal, Bryant said.

"It makes it more palatable for investors if they don't have to leave their money tied up," Bryant said.

The current drive to garner equity investments drive continues through Dec. 31.

Source: nwitimes.com


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