Clean technology pioneer has plans to go public

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Auckland clean technology company LanzaTech is planning a public listing within the next two years, says its boss.

But Jennifer Holmgren, the firm's Chicago-based chief executive, says she cannot give any more details on the proposed initial public offering (IPO), such as where or exactly when it might take place, as the board is yet to approve a plan.

She says the commercialisation of LanzaTech's technology - a proprietary microbe that converts industrial flue gases into valuable chemicals such as ethanol, used to make biofuel - is on track to begin by 2013.

The company has also produced 2,3-Butanediol, used in the production of polymers, plastics and hydrocarbon fuels.

If LanzaTech were to list on the NZX, however, it would be floating on an exchange that has a chequered history with biotech firms.

Genesis Research and Development, the first New Zealand biotech company to list on the NZX and ASX in 2000, suspended its operations last year because of a lack of funding.

ICP Bio, which made proteins and serum for the pharmaceutical and biological sectors, went into receivership in May 2008, just two years after listing on the NZX.

Market commentator Arthur Lim said the track record of past NZX biotech listings would weigh heavily on local investors if LanzaTech went ahead with an IPO in New Zealand.

He said it would make more sense to list on the ASX, which had seen successful listings of firms in that sector.

Auckland Regional Biosciences Group chairman Peter Bradley said LanzaTech was a "very different kettle of fish" from other biotech firms that had floated on the local market.

"Taking somebody's waste and turning it into something valuable - it's a dream business really."

But Bradley said a listing on the Shanghai exchange would make more sense for LanzaTech than a New Zealand listing.

"There's an awful lot of money in China at the moment that's looking for a home."

Last year LanzaTech co-founder and chief scientist Sean Simpson said the plan was to enter partnerships with industrial corporations and share in the profits gained from the technology.

In the past 12 months the company has signed agreements with China's largest steel firm, a prominent Chinese coal producer and IndianOil, India's biggest company by revenue.

LanzaTech now has the opportunity to test its technology in those firms' plants.

Holmgren said LanzaTech would require larger amounts of capital than it was getting from its current backers - which include Stephen Tindall's K1W1 fund, United States venture capital fund Khosla Ventures and Shanghai-based Qiming Ventures - as it entered its commercialisation phase.

Listing would also give the firm a "true value" and provide an exit strategy for its initial stakeholders.

"We want [to become] a public company with revenues that are self-sustaining," said Holmgren. "We don't want to keep going to our investors for money."

She said LanzaTech's goal was to become a billion-dollar business within seven years.

Last July the company announced it would work with Baosteel, China's largest steel and iron conglomerate, to commercialise its technology.

Holmgren said a "demonstration facility" would be ready at one of the Chinese company's sites by October. If that proved successful a much larger commercial production facility would be built at a Baosteel plant.

Holmgren said the company would need to raise additional capital later this year to fund its expansions, which would come from existing stakeholders and new "strategic" investors.

"If you're making a fuel it's good to have a refiner, or an auto company or an aviation company [as an investor]."

LanzaTech was founded in 2005 and employs 50 staff in Auckland, Shanghai and Chicago.