Boston, MA 03/31/2014 (wallstreetpr) – BioFuel Corp. (NASDAQ:BIOF)’s stock continues to explode in the market by highs of up to 88% after David Einhorn’s Greenlight Capital disclosed plans to increase its stake in the company. It is being reported that Green Light Capital has already submitted a preliminary non-binding proposal for a possible takeover of BioFuel.
Greenlight in the statement maintains that after full acquisition, Brickman will be the new CEO of the company with David Einhorn taking is seat in the board. BioFuel has confirmed to have received the proposal and consequently formed a committee of independent directors to evaluate the transactions details and report on the best way forward.
Greenlight Proposal
Greenlight capital founded by hedge fund manager David Einhorn, plans to purchase BioFuel in a deal thought to be around $275 million involving cash and equity. Greenlight in a letter to BioFuel provides a preposition in which the company’s shareholders will be allowed to acquire interest in the business with long term equity potential.
Greenlight has also announced it has increased its stake in the company from 26.2% to 29%.The purchase price for acquisition of BioFuelwill befunded through a combination of a new debt financing as well as through the issuance of common stock.
BioFueladopts a New Net Operating Loss Plan
BioFuel Corp. (NASDAQ:BIOF) board of directors has alsoadopted a rights plan aimed at preserving the company’s net operating loss tax assets. As of December 31, 2013 the company’s net operating tax loss from carry forwards stood at $178.2 million.
The company’s proposed right plan is similar to other adopted plans by public companies grappling with significant tax assets. BioFuel ability to utilize its tax attributes in the future will mostly depend on its ability to undergo an “Ownership change” as defined in the Internal Revenue Code.
BioFuel Corp. (NASDAQ:BIOF)’s board has also declared a dividend of one preferred share for each of the company’s stock due in April 7, 2014. This is essentially means that if any person or group acquires more than 4.99%of the company’s outstanding shares subject to certain exceptions will trigger the NOL plan. With the adoption of the NOL plan, the company has also amended its limited liability company agreement. The new amendments are aimed at protecting holders of membership interests.
