Metalico boosts stake in Beacon Energy

Cranford, N.J.-based scrap metal recycler Metalico said today it increased its stake in Cranford neighbor Beacon Energy, a biofuels producer.

Metalico said it put $2 million into a recent $5.5 million private placement by Beacon, formerly AgriFuel, boosting its stake to 44.5 percent.

"The emerging biodiesel industry is being adversely impacted by the high cost of feedstock relative to the selling price of finished product," said Carlos Agüero, who serves as chairman of both Beacon and Metalico.

"In addition, existing operations are being hampered by the abrupt change in the credit markets, which has created a very challenging environment for many fledgling biodiesel projects. We believe these conditions will provide attractive roll-up opportunities allowing Beacon to cautiously accelerate our participation in the industry," said Agüero.

In March, Beacon announced that it bought stakes in York, Penn.'s United BioFuels and Buffalo, N.Y.-based Buffalo Biodiesel. At the time the company said it was also finalizing the terms of an investment in a Midwestern biodiesel producer.

Founded in 2006, Beacon has raised $16 million in private equity to date. Beacon said it has commenced a feasibility study for an east coast production facility that it would construct and operate directly.

Agüero, who put $900,000 into the private placement, holds 9 percent of Beacon.