After posting my last comment, a few responses were made that I concluded required further comment.
Let me start with a little history. [And I apologize for the length of this piece.]
Those familiar with the science of succinic acid, BioAmber's product produced at their Sarnia plant, know that succinic acid is a key building block for a wide range of secondary chemicals. This includes uses in pharmaceuticals, food, agriculture, and other chemical products. Chemists, or "scientists" studying properties of various chemicals, knew about succinic acid as early as the 16th century. Then it was distilled from amber, and was known as "Spirit of Amber." By 1877 scientists knew that succinic could be used as an antibiotic and natural remedy. Some doctors even used it to treat diabetes.
Until the 20th Century, petroleum was the primary source of succinic acid. With the fearful talk of "peak oil" growing in the later years of the 20th century, research chemists sought ways of deriving succinic acid from sources other than petroleum, not the least because of the high cost involved in producing it from petroleum.
Eventually, researchers who were precursors to those who developed BioAmber's product, proved succinic acid could be fermented from biomass of comprised of various organic materials. A step toward non-petroleum based succinic acid was taken in 2004, when the U.S. Department of Energy placed succinate (a succinic acid salt) on its list of 12 platform chemicals from biomass.
BioAmber, Inc., started as a former joint venture between US-based DNP Green Technology and ARD (Agro-industrie Recherches et Développements), announced the successful start-up and commissioning of the world’s first bio-based succinic acid plant. It set up a test facility in France in 2008. Until BioAmber began producing succinic acid, it was produced primarily from petroleum feedstock.
Now Real McCoy suggested that BioAmber had no successes. Profitability is not the only measure of success. Indeed, with patents in hand, the BioAmber team provided proof of concept with their plant in France. By 2012 the market of succinic acid was around 60 kton/year and was expected to grow to 665 kton/year until 2020. With these numbers, the BioAmber team was, indeed, looking at future of profitability. It was only natural to seek financing for a larger plant. They got the capital, and built the Sarnia plant which began production in late 2015.
In late 2014, BioAmber's CEO, Jean-Francois Huc, stated that BioAmber had two goals: the completion of the Sarnia plant, and developing plans for constructing a second plant.
Unfortunately, just as BioAmber's corporate goals seems to be within finger-tip reach, the price of oil dropped. To make a profit, BioAmber's succinic acid production needed the price of oil to stay above $40/bbl -- not $62/bbl as Mr. Pirate suggested. Unfortunately, during 2015 and 2016, the price dipped quickly from over $100/bbl. to under $35/bbl. in 2016. At the same time, the price of corn sludge rose during 2016, peaking in the summer of 2017. It was at this time, that Richard Eno replaced Jean-Francois Huc as CEO.
We can imagine that the BioAmber team was shocked and depressed as these three years -- 2015, 2016, 2017 -- moved on. Products on whose prices their success depended did not behave as they expected. The future, looking back, looked bleak.
However, the prognosis was not as bleak, it was just difficult to predict. Biowin and I.E., and others, have already show that the market for BioAmber's product has grown in recent years as the original BioAmber team expected. Their prognostications were not wrong, they were just delayed. We don't know what occurred in their deliberations, but they ought to have been able to deduce one historical fact: since 1915 the value of the U.S. Dollar has steadily declined in value, meaning that the cost of goods and services have steadily risen. In short, the oil price was not going to stay at $34/bbl; and, the corn sludge prices would likely decline in direct proportion to any increase in production, from expanding productive farmland, that would increase demand for succinic acid, now cheaper than petroleum-based succinic acid in many secondary products.
Oil prices began 2017 by breaking $50/bbl and hit $75/bbl. at summer's end, but dropped back to $50/bbl in late 2018. Meanwhile, negotiations to restructure BioAmber also closed in 2018. Shareholders know the rest of the story, as least as much as the courts and PWC have revealed.
There is no doubt that BioAmber had a decade of success, getting its proof of concept for a marketable product based on its patents. It succeeded in getting two plants up and running, one smaller test plant in France and the Sarnia plant. The Board was even looking into expanding production with another plant. And it was NO failure when faced with an absolute drop in oil prices.
There are two anomalies in all the information we have is: 1. How could the Board of Directors, or the key financiers supporting BioAmber's venture, agree to sell a $140M plant for $4.34M, not to mention $Billion patents? 2. What happened to the $1.56B that KKR advanced to Visolis/LCY, neither company being in a position to do better than BioAmber, facing the same economic forces and bad luck that posed problems for BioAmber in the first place? Visolis was a starup whose state of financial viability was about the same as BioAmber's was in 2008 or earlier. LCY had just lost a major criminal trial in Taiwan, and it's financial cost was still unclear and success in this area unpredictable. [Bowie Lee probably had to pay his lawyers more than he paid for the Sarnia Plant, if what many naysayers suggest is true.]
Those who say, "LCY bought all BioAmber's assets," haven't proved it. And Deepak's Visolis letter provides but an unrealistic optic.
Meanwhile, we do know that Mr. Eno and PWC, irrespective of their sequence of reports, have not been completely forthcoming with the details of the negotiations for restructuring BioAmber's finances. AND we know that companies today are successfully producing succinic acid in a growing market, likely getting access to BioAmber's original patents.
I'll only conclude with these three points. 1. There's a lot we still don't know about what went on in the wheeling-dealing behind the scenes by Eno and others as BioAmber's assets changed hands. The only thing that makes rational sense is the pursuance of a two-step restructuring process, once the original Visolis/LCY plan fell through, as it had to have done by late June 2018. 2. There are reasonable explanations for the long delay in getting a full legally binding report, includng all the details of the negotiations, which we have a right to know. And 3. PWC and its negatory friends on the forum have left us with an irrational, surrealist picture of the actual state of affairs -- ever seen Edvard Munch's painting, "The Scream", a surrealistic picture of a negative reality?
Looking around today, we see a realist picture of growing success for BioAmber's earlier efforts and continued use of its patents, which we believed in and invested in ... BECAUSE we, too, saw the need to reduce dependency on petroleum and we saw value in investing in a biodegradable product that accomplished the same thing in the economy as barrels upon barrels of oil without destroying the environment.
