A RENEWABLE fuels company could be ripe for takeover after a turbulent four days on the stock market wiped more than a third off its share price.

Biofuels Corporation's stock plummeted after it revealed delays in its project to build one of Europe's largest biodiesel refineries, at Seal Sands, Teesside.

In a stock exchange announcement on Friday, Biofuels confirmed it was shelving plans to sell its ultra-low sulphur diesel (ULSD) in Germany.

The Billingham company had previously predicted the German market would account for about 70 per cent of its sales.

Directors were in London last night discussing the company's future.

The share price fell from about £2.20 to below £1.40 on Tuesday, but yesterday rallied to £1.54 by the close.

Jeremy Chantry, from Collins Stewart, the company's stockbroker, said: "The delay and setback in Germany is best seen as a postponement or delay in future rewards.

"We believe Biofuels has a number of ongoing discussions in the UK, which could lead to further contracts over the next six months.

"We would also expect the company to be seen as attractive to a predator - either an oil company or utility."

Biofuels had expected the £21m Seal Sands plant to be on line this summer. But a four-week delay forced it to issue a revised date, with production due to start by the end of September.

The plant will be able to produce up to 284 million litres of biodiesel a year.

The fuel is five per cent standard diesel and 95 per cent green diesel - refined from renewable vegetable oil crops such as palm and rape seed oil. It has much lower emission levels than mineral diesel.

The company's board of directors decided to pull out of the German market after discussions with potential customers revealed Biofuels had overestimated the selling price of its product.

In the short-term, it plans to concentrate on UK sales, where the cost of USLD means there is a much higher margin, while pursuing other European markets.

The company made its debut on the Alternative Investment Market (Aim) in June, with shares opening at 75p. They reached a high of £3.11 in March.

The company recently predicted a 12-month operating profit of £14m. This has been revised to between £5m and £10m.

But Collins Stewart believes it still represents a sound long-term investment.

Mr Chantry said: "In the UK, Biodiesel is expected to sell at a premium. These problems in Germany could well prove to be short-term and, longer-term, this is still a potentially attractive market."