Entrepreneur Doron Levi had a biofuel dream that went up in smoke Monday, when after chalking up a cumulative loss of $7.2 million, trade in shares of his company, Galten Biodiesel, was stopped. The company announced that after two years of activity it has decided to submit a debt arrangement request to the court..
In his once promising dream he saw the fruit of the jatropha plant, which grows naturally in Ghana, harvested and transported to a factory that would derive from it biodiesel for car engines. Biodiesel is in demand in Europe, because it leads to a reduction of almost 80% in CO2 emissions, and does not emit sulfuric acid and other harmful substances.
In order to realize his dream, in 2008 Levy started Galten Biodiesel. The company had few assets and sources of capital. Despite that, and despite the severe economic crisis, at the end of 2009 Galten submitted a forecast for raising an initial sum of NIS 40 million on the Tel Aviv Stock Exchange.
The fundraising was unsuccessful, but Levy was undeterred. He continued to try his luck, and at the end of 2011 Galten Biodiesel arrived on the TASE via a reverse merger with stock exchange shell Alumot Sprint at a valuation of NIS 80 million.
As part of the transaction, Alumot purchased all of Galten's capital shares, and in exchange allotted bonds to Galten's shareholders in a private transaction, with about 40% of its shares remaining in public hands. In 2012, former Mossad chief Meir Dagan was appointed vice president of the company, a position in which he still serves.
But entering the TASE was not of much help to Galten. The company lost most of the money in the Alumot Sprint coffers and its value quickly eroded. Within only two years Galten lost 95% of its value, which plummeted to just NIS 3 million. Recently the firm also discontinued negotiations to provide biodiesel to a Polish company, Wratislavia, due to its inability to produce jatropha-derived fuel in commercial quantities, which resulted in the loss of a $12 million contract.
Joining the business failure was the fact that disappointed institutional investors turned their backs on the company and refused to provide financing. In April 2012 the company was very close to a stock offering, but it was cancelled at the last moment.
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