Velocys convertible loan notes extension falls short

An aerial view of Velocys Ohio Facility.

Velocys said that it has failed to meet the deadline to complete the funding deal announced earlier this year.

“The company announced on September 21st 2023 that the longstop date for the convertible loan notes (CLN) transaction had been extended to October 31st 2023. The CLN terms included … a commitment by Carbon Direct Capital to invest $15m via the CLN subject to certain conditions including a minimum aggregate raise of $40m (including proceeds from the placing of new ordinary shares in the company completed in May 2023), which have not been satisfied,” said the company in its funding update.

The company’s board said they were in active funding discussions with all strategic investors are in place to obtain long term funding. However, it added that any investment resulting from these discussions is unlikely to be on the same terms as the previously announced CLN.

In May earlier this year, Velocys announced a plan to raise at least $38.9m to scale up the business through a share offering, retail offer, open offer, and conditional issuance of convertible loan notes. The company’s offering document said the additional capital raise will support significant scale-up and ambition to become a leading provider of Sustainable Aviation Fuel (SAF) solutions.

Velocys has no binding arrangements for funding at this stage.

The company anticipates that it will require more funding before the end of this calendar year and therefore it is exploring near term funding options as discussions with the strategic investors continue.

Shares in green fuel technology firm Velocys shares plummeted by 68% after the announcement to 0.32p.

Velocys is an LSE-listed sustainable fuels technology company providing customers with a technology solution to enable the production of negative carbon intensity synthetic drop-in fuels from a variety of waste materials.