CENAQ Energy Corp. (NASDAQ: CENQ) (“CENAQ”), a special purpose
acquisition company focused on energy and energy transition, and
Bluescape Clean Fuels Intermediate Holdings, LLC (“BCF”), a private
company positioned to be a leading supplier of gasoline derived
from renewable feedstocks, announced today the signing of a
definitive business combination agreement (the “Business
Combination Agreement” and such transactions contemplated thereby,
the “Business Combination”). Upon closing of the Business
Combination, the combined company will be named Verde Clean Fuels,
Inc. (“Verde Clean Fuels”), and is expected to become publicly
listed on the NASDAQ under the symbol “VGAS.”
Bluescape Clean Fuels Holdings, LLC (“Bluescape
Holdings”), the current controlling shareholder of BCF, and a
portfolio company of the Bluescape Energy Recapitalization and
Restructuring Fund IV LP which is managed by Bluescape Energy
Partners LLC, will remain the largest shareholder in Verde Clean
Fuels following the closing of the Business Combination with
ownership between approximately 46.5% and 66.9% depending on
redemptions from the existing public shareholders of CENAQ.
Founded in 2007, BCF has developed a proven and
patented process to efficiently and economically produce gasoline
from Renewable Fuel Standard (“RFS”) compliant renewable
feedstocks. BCF currently has its initial 7 million gallon per year
facility in development at a landfill site owned by Waste
Management, Inc. (NYSE: WM and doing business as WM) in Maricopa,
Arizona. BCF also has larger facilities in the initial stages of
development in numerous other locations in the United States
utilizing various RFS compliant green renewable feedstocks. BCF’s
process utilizes waste feedstocks that are otherwise landfilled
providing an economic advantage resulting in extremely attractive
margins while its renewable gasoline is over 60% less carbon
intensive than traditional hydrocarbon-based gasoline based on
GREET-style Carbon Intensity analysis.
“We are excited to combine with CENAQ to create
Verde Clean Fuels. BCF’s product is a proven “drop in” replacement
for hydrocarbon-based gasoline and provides significant
environmental and economic advantages as compared to traditional
gasoline. This combination will not only provide the funding for
BCF’s planned growth, but also the opportunity to leverage the
capital markets experience and management expertise of CENAQ’s
sponsor group, to create a leading provider of renewable gasoline
to the North American markets,” said Ernest B. Miller, CEO of
BCF.
“Partnering with BCF in the creation of Verde
Clean Fuels fits perfectly with our goal of gaining exposure to an
energy transition opportunity. Ernie Miller and his team have an
outstanding track record of successfully financing and developing
complex large energy industrial projects and we believe that the
significant number of existing opportunities to deploy their proven
technology will increase as a result of BCF becoming a publicly
listed entity,” commented J. Russell Porter, CEO of CENAQ.
Transaction Overview
The business combination values BCF at an
implied US$280 million enterprise value and a pro forma equity
value of approximately US$500 million, assuming no redemptions.
Bluescape Holdings will receive shares of Verde Clean Fuels as
consideration. In connection with the transaction, investors led by
Arb Clean Fuels Management LLC and Bluescape Holdings have
committed to invest $80 million in a private placement of CENAQ’s
Class A common stock at $10.00 per share immediately prior to the
closing of the Business Combination. The proceeds will be used to
fund Verde Clean Fuels’ initial facility as well as future
renewable gasoline facilities currently under development. CENAQ
may choose to raise additional capital prior to the closing of the
Business Combination.
Assuming no redemptions from CENAQ shareholders,
the economic ownership structure following the Business Combination
is expected to be approximately: 46.5% Bluescape Holdings, 10.4%
PIPE shareholders (other than Bluescape Holdings), 36.1% CENAQ
public shareholders and 7.0% CENAQ’s sponsor, CENAQ Sponsor
LLC.
The Business Combination, which has been
approved by the Board of Managers of BCF and by the Board of
Directors of CENAQ, is expected to close during the first quarter
of 2023, subject to the approval of the shareholders of CENAQ and
other customary closing conditions. CENAQ intends to file a proxy
statement in connection with the Business Combination with the U.S.
Securities and Exchange Commission (“SEC”) prior to August 16,
2022, and accordingly, the period of time by which CENAQ is
required to complete its initial business combination will be
automatically extended to November 16, 2022.
Investor Presentation and
Webcast
More information, including an investor
presentation, will be accessible in the investor section of CENAQ’s
website (www.cenaqenergycorp.com). Additional information about the
proposed Business Combination, including a copy of the Business
Combination Agreement and investor presentation, will be provided
in a Current Report on Form 8-K that will be filed by CENAQ with
the SEC and will be available at www.sec.gov.
Advisors
Imperial Capital is serving as financial advisor
to CENAQ. Vinson & Elkins L.L.P. is serving as legal counsel to
CENAQ.
Kirkland& Ellis LLP is serving as legal
counsel to BCF.
Baker Botts L.L.P. is acting as legal counsel to
Imperial Capital.
About Bluescape Energy
Partners
Bluescape Energy Partners, is an alternative
investment firm that leverages its private capital, global network,
and superior thinking to deliver differentiated long-term
investment performance in the broader energy and utility sectors.
Bluescape Energy Partners employs a unique approach and long-term
perspective, helping position companies for growth and value
creation by providing capital and strategic oversight with its
multi-disciplined team of executive-level managers, operators,
strategic consultants, and restructuring advisors. It thrives to
uncover investments exhibiting high performance potential where it
seeks to build lasting partnerships. Bluescape strives to create
positive impacts for all of its stakeholders through its capital,
operational capabilities, and long-term ownership model.
About CENAQ Energy Corp.
CENAQ Energy Corp. is a blank check company
formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses. CENAQ
Energy Corp. focused its search for a target business in the energy
industry in North America. CENAQ Energy Corp. is led by energy
industry veterans J. Russell Porter (CEO), Michael J. Mayell
(President and CFO) and John B. Connally III (Chairman).
Important Information for
Shareholders
This communication does not constitute a
solicitation of any vote or approval.
In connection with the Business Combination,
CENAQ will file with the SEC a preliminary proxy statement. CENAQ
also plans to file other documents with the SEC regarding the
proposed Business Combination. After the proxy statement has been
cleared by the SEC, a definitive proxy statement will be mailed to
the shareholders of CENAQ SHAREHOLDERS OF CENAQ ARE URGED TO READ
THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED BUSINESS
COMBINATION THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION.
Shareholders will be able to obtain free copies of the proxy
statement and other documents containing important information
about CENAQ and BCF and its affiliates once such documents are
filed with the SEC, through the website maintained by the SEC at
http://www.sec.gov.
Participants in the Solicitation
CENAQ and its directors and executive officers
may be deemed to be participants in the solicitation of proxies
from the shareholders of CENAQ in connection with the proposed
Business Combination. BCF and its officers and directors may also
be deemed participants in such solicitation. Information about the
directors and executive officers of CENAQ is set forth in CENAQ’s
Annual Report on Form 10-K filed with the SEC on March 30, 2022.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials to be filed with
the SEC when they become available.
Forward Looking Statements
The information included herein and in any oral
statements made in connection herewith include “forward-looking
statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of present or historical fact included herein,
regarding the proposed Business Combination, CENAQ’s and BCF’s
ability to consummate the transaction, the benefits of the
transaction, CENAQ’s and BCF’s future financial performance
following the transaction, as well as CENAQ’s and BCF’s strategy,
future operations, financial position, estimated revenues and
losses, projected costs, prospects, plans and objectives of
management are forward-looking statements. When used herein,
including any oral statements made in connection herewith, the
words “could,” “should,” “will,” “may,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project,” the negative of such
terms and other similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking
statements are based on CENAQ and BCF management’s current
expectations and assumptions about future events and are based on
currently available information as to the outcome and timing of
future events. Except as otherwise required by applicable law,
CENAQ and BCF disclaim any duty to update any forward-looking
statements, all of which are expressly qualified by the statements
in this section, to reflect events or circumstances after the date
hereof. CENAQ and BCF caution you that these forward-looking
statements are subject to risks and uncertainties, most of which
are difficult to predict and many of which are beyond the control
of CENAQ and BCF. These risks include, but are not limited to,
general economic, financial, legal, political and business
conditions and changes in domestic and foreign markets; the
inability of the parties to successfully or timely consummate the
proposed Business Combination or to satisfy the closing conditions,
including the risk that any required regulatory approvals are not
obtained, are delayed or are subject to unanticipated conditions
that could adversely affect the combined company; the risk that the
approval of the stockholders of CENAQ for the proposed Business
Combination is not obtained; the failure to realize the anticipated
benefits of the proposed Business Combination, including as a
result of a delay in its consummation; the amount of redemption
requests made by CENAQ’s stockholders; the occurrence of events
that may give rise to a right of one or both of CENAQ and BCF to
terminate the definitive agreements related to the proposed
Business Combination; the risks related to the growth of BCF’s
business and the timing of expected business milestones; and the
effects of competition on BCF’s future business. Should one or more
of the risks or uncertainties described herein and in any oral
statements made in connection therewith occur, or should underlying
assumptions prove incorrect, actual results and plans could differ
materially from those expressed in any forward-looking statements.
There may be additional risks that neither CENAQ nor BCF presently
know or that CENAQ and BCF currently believe are immaterial that
could cause actual results to differ from those contained in the
forward-looking statements. Additional information concerning these
and other factors that may impact CENAQ’s expectations and
projections can be found in CENAQ’s periodic filings with the SEC,
including CENAQ’s Annual Report on Form 10-K filed with the SEC on
March 30, 2022 and any subsequently filed Quarterly Report on Form
10-Q. CENAQ’s SEC filings are available publicly on the SEC’s
website at www.sec.gov.
Contacts
Investor Relations Contact
For CENAQ Energy Corp.:J. Russell Porter –
CEOrporter@cenaqcorp.com(305) 799-4822
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