October 2014 saw a clear signal of the mood of the industrial wood pellet, industry in the US when leading pellet maker Enviva filed its plans for a $100 million (?94.5 million) IPO. In the filing with the Securities and Exchange Commission (SEC), private-equity backed Enviva Holdings will list a wholly owned subsidiary as a master limited partnership. This is a tax efficient structure common in the North American energy-sector that uses long term fee income from fixed assets like pipelines and terminals - and now it seems pellet plants - to pay out regular dividends. In Enviva's case, the income would come from long term off-take contracts with European utilities, which receive subsidies for burning pellets rather than fossil fuels.
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