Greenergy, the UK's third biggest private firm by turnover, will offer staff share options in the business, paving the way for a £500m-plus flotation.
The £9.8bn-revenue firm, which supplies one-fifth of all road fuel sold in Britain and is part-owned by customer Tesco, has hired bankers to review how best to grow the business. They are looking at possibilities including a bond issue and potential acquisitions, but chief executive Andrew Owens has long harboured hopes of a flotation.
The offer of options to staff that meet certain criteria, such as length of service, is a signal that a London listing is still the ultimate aim, as it incentivises staff with an eventual cash-in on their stock.
Mr Owens told The Independent he hoped to complete the distribution of options this quarter. "The staff have equity or will get options before the financial year end in April, which gives them a share of any future valuation [of Greenergy]," he said. Most of the staff-owned equity is held by the directors, so the issue of options will broaden ownership of the company. Greenergy was last said to have 117 staff.
Mr Owens, who co-founded the company with non-executive director David Rees in 1992, has made several moves in recent years to prepare the company for the rigours of the London Stock Exchange. There is a glossy annual report, top-notch advisers, and Mr Owens brought in Paul Lester as non-executive chairman in 2010. Mr Lester was previously chief executive of the FTSE 250 support services company VT Group and quoted construction leader Balfour Beatty.
However, Mr Owens played down the likelihood of a flotation in the short-term, due to the volatility of the stock market. Potential investors are particularly conservative at the moment, meaning it would be difficult to get a valuation on a company that made a profit margin of just £17m last year.
He said: "An IPO [flotation] is a growing up stepping stone for a business. There are challenges. There aren't any obvious comparable companies [to help fund managers value Greenergy], as we are an unusually shaped company."
Andrew Owens is one of 12 rising stars for 2012 in The Independent on Sunday's business section tomorrow
*The Government has awarded 46 licences to companies to explore for oil and gas despite concerns from environmentalists that marine ecosystems could be at risk. The licences include sites in the English Channel, North Sea and West of Shetland.