Towngas' sustainable fuel producer EcoCeres eyes Europe IPO

Hong Kong & China Gas’ (0003) EcoCeres, a producer of sustainable fuel backed by Bain Capital, is exploring an initial public offering that could value the company at about US$5 billion (HK$39 billion), people familiar with the matter said.

The Hong Kong-based company is considering pursuing a listing next year on an exchange in Europe, the people said, asking not to be identified discussing confidential information. London is among venues being considered, the people said, adding that EcoCeres hasn’t completely ruled out Hong Kong as a potential destination.

The IPO could raise US$500 million to US$1 billion depending on market conditions, according to the people. Deliberations are at an early stage and details of the IPO plans could still change, the people said.

EcoCeres was set up by Hong Kong & China Gas, a local utility known as Towngas, and Bain invested in 2023. The company converts biomass waste into products including renewable aviation fuel, hydrotreated vegetable oil, renewable naphtha and cellulosic ethanol.

Towngas referred queries to a spokesperson at EcoCeres, who declined to comment. A representative for Bain also declined to comment.

Listing activity is starting to pick up, driven by planned share sales from private equity-backed companies. For London, a listing of EcoCeres would be a major boost after the bourse slid in the global IPO rankings last year.

EcoCeres is benefiting from increased demand as the European Union encourages greater use of renewable fuels. The biomass company aims to increase its production of sustainable aviation fuel fivefold to 500,000 tons by 2026, according to one of the people.

Bloomberg