Altato Immingham: £4.1m takeover bid for company behind multi-million green jet fuel plant plans

But it has now revealed that the company is “unlikely” to be able to continue as a going concern in its current form past December unless new funding is secured, with a potential takeover bid now on the table. The consortium behind the bid is expected to inject “significant funding” into the business.

Altato Immingham is intended to be Europe’s first commercial scale waste-to-jet-fuel facility and last year received a Government grant of up to £27m to help progress the proposal ahead of a final investment decision on building the plant in 2025.

But last month shares in Velocys dropped after a planned $15m (£12m) investment by New York green investment firm Carbon Direct Capital in the firm fell through as a consequence of a failure to raise an aggregate $40m in funding.

Velocys has now revealed that Carbon Direct Capital is part of a consortium which has made a non-binding indicative all-cash offer for the shares of the company.

The consortium, which also involves global private equity firm Lightrock, has valued the company’s share capital at £4.1m or 0.25p a share, with Velocys describing the figure as a “substantial discount” on the current share price. On Monday morning, shares in the company dropped by 60 per cent following the announcement.

In a statement to the Stock Exchange, Velocys said: “The possible offer includes the intention for the consortium to provide significant funding for the company to meet its long-term growth capital needs.

“In addition, the company is in discussions with the consortium regarding near-term funding. There can be no certainty that an offer will be made for the company, nor as to the final terms of any offer, if made.

“The company expects to require funding before the end of this calendar year and, notwithstanding the possible offer (including discussions on near-term funding in connection with the possible offer), there are no binding arrangements in place for near-term funding.

“The company continues to explore cost control and other measures to extend the cash runway, however, at present, in the event that the possible offer (including near-term funding) does not progress shortly, and in the absence of other meaningful sources of funding or strategic options, it is currently unlikely that the company will be able to continue as a going concern beyond the end of December.

“Accordingly, the company continues to explore its options including the possible sale of the company.

“The company notes that the timing for significant progression of the development capital fundraises for Velocys' reference projects is expected to be dependent on the resolution of the company's fundingchallenges.”