August 19, 2017 – SynSel Energy, Inc. announced that they have executed a Term Sheet and Commitment Letter from a private lender to provide $600M in construction funding to build two $300M SynSel Biorefineries. One plant will be located in Ontonagon, Michigan and one plant will be located in Grand Rapids, Minnesota. SynSel CEO Tim Tawoda described the private lender's structure as a “non-traditional construction loan that requires the creation of a $75M Good Faith Account (GFA) for each biorefinery to meet lending covenants.” Mr. Tawoda further stated that the private lender has voiced an interest in funding 100 SynSel plants across the US and that the initial $600M construction loan will close 60 days after the GFA is funded. The loan covers all pre-construction and construction activities.
The GFA is like a letter of credit, except there is no scenario in which the funds can be surrendered to anyone but the owner of the account. The GFA is not collateral or security, but it does carry a fixed return to the GFA owner. The private lender is a true business partner in that SynSel will be splitting plant profits with the lender – hence the lender is motivated to provide funds at favorable terms for as many projects as SynSel can develop. These plants are going to have a dramatic impact to the economic viability of these 2 very distressed rural communities.”