Velocys intends to raise £6 million (€6.7 million) through a placing, according to an announcement from the company.
The renewable fuels specialist will place 60,000,000 new Ordinary Shares at a placing price of 10 pence per share. This represents a 0.52p discount to the closing mid-market price per Ordinary Share as at 20 July 2018.
According to Velocys’ statement, net proceeds of the placing will be used to strengthen the company’s balance sheet, as well as contribute to a number of other initiatives it is involved in. These include its UK waste-to-renewable jet fuel project, the ENVIA project and Velocys’ Mississippi biorefinery project.
“Today’s financing enhances our runway and will be used to drive forward our US and UK projects to meet their next major milestones over the coming months and to support ENVIA,” said David Pummell, CEO of Velocys.
The ENVIA Energy gas-to-liquids plant in Oklahoma is the first commercial scale plant using Velocys technology. Earlier this year, an internal leak in one of the facility’s FT reactors meant that reactor had to be taken out of operation. According to Velocys’ statement, some of the funds raised through the share placing will go towards allowing Velocys to continue supporting the joint venture to the point the Company “understands the financial plan to restore the second reactor to operation.”
In Mississippi meanwhile, Velocys is building its first US biorefinery. According to the company part of the funds raised through the placing will be used to support the process of on-boarding strategic investors to the project.
“In particular I look forward to keeping our shareholders informed of our progress as we prepare to onboard one of more strategic investors into our Mississippi project during the coming months,” Pummell continued.
“We continue to make significant progress with our projects and I look forward to periodically hosting Webcasts to discuss our strategy and progress as we drive our Company forward into an incredibly exciting future.”