Ethanol play Renova Energy has followed a bullish trading update with a �10.75 million placing at 215p to help fund expansion.

If shareholders approve next month, AIM-quoted Renova will place the shares with institutions and some directors, at a 7.5 per cent discount to yesterday's market price, through broker Bell Lawrie (an arm of Brewin Dolphin). The placing is part of a financing package for the construction of the company's second fuel-grade ethanol facility, at Heyburn, Idaho, for which Renova has also secured a $32.2 million increase in bank facilities to �42.2 million (�22 million).

London-based Renova, which produces, distributes and markets ethanol from corn for use in vehicles in the US Midwest, says it expects the 22 million-gallon Heyburn facility to supply its own energy through by generating bio-methane as a by-product. Chairman Chris Thomas hails the financing as a 'significant step forward for the company following the start-up of a new expanded plant in Torrington, Wyoming, last month'.

The key to success in Renova's business is to source, process and distribute the ethanol in the same area and, according to Thomas, Idaho is a 'core market'. Last month, the company said sales volumes had grown 39 per cent year-on-year in the June quarter, with realised ethanol prices up 50 per cent to $2.55 a gallon.

Recommended by Growth Company Investor at 91.5p in August 2005 and again at 152.5p in December, Renova shares peaked at 262.5p in February this year and are 4p up today at 237.5p, valuing the company at �65.5 million. Partial profit taking might be prudent, but it is worth holding a fair chunk for potential longer term gains.

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Renova Energy	AIM	�38.49m	118.00p	0.00p
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