Jatoil IPO raises funds to meet biofuel demand

A new Australian biofuel company, Jatoil, has closed its $10 million initial public offering oversubscribed.

The budding biofuel company was offering up to 35 million shares at $0.20 each to raise up to $7 million and had begun accepting oversubscriptions.

Its prospectus allows for oversubscriptions up to a maximum total of $10 million.

The final value of the raising will be determined this week, the company said in a statement on Sunday.

Jatoil plans to supply rising international demand for biofuels by growing and selling low-cost biodiesel feedstock overseas.

Its main commodity will be Jatropha oil — derived from a low-cost, high-yielding, fast-growing plant of the same name.

Unlike other biofuel sources such as soya bean, the jatropha plant is non-edible and oil production does not compete with human food, the company said.

Executive chairman, Mike Taverner used his announcement at the UN climate change conference in Bali to urge the new federal Labor government to not let the Australia biofuel industry fall behind.

“The Rudd government needs to work with the biofuels industry to make more Australians aware of the benefits of biofuels and to drive demand,” he said.

“The government also needs a plan to move the Australian industry away from a reliance on human food crops as biodiesel feedstock. The use of these inputs is too expensive and unsustainable.

“Biofuels from sustainable feedstocks are an important tool to combat global warming and the skyrocketing cost and diminishing supply of crude oil.”

Jatoil plans to list on the ASX in the week commencing December 17.