Velocys delists from AIM
An aerial view of Velocys Ohio Facility.
Velocys has completed voluntary delisting from the Alternative Investment Market (AIM) – sub market of the London Stock Exchange – following the acquisition from Madison Bidco.
The company was delisted from the AIM on January 18 as part of the £4.5m deal which allows it secure an infusion of £32m growth capital from Madison Bidco (a consortium of US, UK and Singapore climate-focused investment houses).
“The deal secures the future of Velocys, our pioneering technology and our industry leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry. For the past twenty years Velocys has had a critical role in the development of reactors, technology and processes which enable the efficient production of lower carbon SAF, and we and our new partners are excited to see what the next twenty will bring,” said Henrik Wareborn, CEO, Velocys.
Velocys plans to use the funds to push forward the delivery of its proprietary Fischer-Tropsch technology which allows for production of sustainable aviation fuel (SAF) from a variety of feedstocks.
“We believe drop-in fuels are the most promising, scalable solution to decarbonize aviation and to deliver climate impact the soonest. Velocys is a scarce supplier with the technology readiness, production capacity, and leadership team to deliver for SAF project partners. We are pleased to be part of this investor consortium and to support Henrik and the Velocys team,” said Josh Dienstag, CIO, Carbon Direct Capital.
The company had been struggling to maintain operations following its failure to meet the conditions required to secure the $15m investment via convertible loans (CLN) in November last year. In the wake of its failure to secure CLN, the company warned it would require an immediate injection of capital to avoid insolvency. The consortium offered to buy the listed company at £0.25 per share, valuing the company at about £4.1m.
Velocys said this offer is at “a substantial discount to the company’s current share price” and result in company no longer being floated on the UK AIM exchange. However, the board, out of options, accepted the offer to continue operations.
The ‘carbon-negative’ technology provider has planned two full-scale SAF bio-refinery reference projects. One in Mississippi, US and the other in the east Midlands in the UK. Both are looking to use the Fischer-Tropsch process to make SAF from municipal solid waste (trash bags) and wood waste. The company plans to showcase the commercial viability of its technology by producing SAF at the two plants.
The company was eyeing dual listing by raising capital from the US markets with plans to achieve a strong foothold in the US market. The company also launched a manufacturing and catalysis facility in the Ohio, US last year.