Gevo's (GEVO) Chevron LOI a 'Strong Vote of Confidence' - Stifel

September 9, 2021 10:18 AM EDT
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Stifel analyst Derrick Whitfield weighed in on Gevo (NASDAQ: GEVO) after a "potential landmark co-investment LOI with Chevron."

The analyst commented, "Before the open, Gevo and Chevron (CVX, NC, $96.66) announced that they have entered into a letter of intent (LOI) to jointly invest in building and operating one or more facilities that would use inedible corn to produce SAF. The companies agreed to, among other things, negotiate a co-investment agreement where Chevron would co-invest with Gevo in one or more projects for the production of up to 150 mmgpy of SAF/isooctane and negotiate a fuel supply agreement. The LOI also contemplates the issuance of warrants to Chevron for up to 15 million shares at a price not lower than $8.50 per share. The warrants would not be issued if the co-investment agreement and fuel supply agreement are not executed by May 31, 2022. While the co-investment details remain to be determined, we view the LOI as a strong vote of confidence in Gevo's Net Zero concept and ATJ technology."

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