REG - ATOME PLC - Yara Offtake Heads of Terms for Villeta Project

AtomeAnnouncement

24/07/2024 07:00

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RNS Number : 5468X  ATOME PLC  24 July 2024

24 July 2024

 

ATOME PLC

("ATOME", "the Company", or "the Group")

 

Offtake heads of terms signed with Yara for 100% of Villeta Project production

 

Key gating item complete on the road to FID and start of construction later
this year

 

Investor Meet Company Presentation

 

ATOME (AIM: ATOM), the leading developer of international green fertiliser
projects, is pleased to announce the signing of Heads of Terms for the
long-term sale to Yara International ASA ("Yara") of all of ATOME's renewable
fertiliser from its 145MW Villeta Project in Paraguay ("Offtake" or "Heads of
Terms").

 

Highlights:

 

·   Long-term Offtake with Yara for ATOME's renewable Calcium Ammonium
Nitrate covering the entire planned 264,000 tonnes p.a production from Villeta

 

·    Yara is the world's leading crop nutrition, production and
distribution company of fertiliser and ammonia product and is at the forefront
of decarbonisation in its industry with Government of Norway the largest
shareholder with 43% direct and indirect ownership

 

·   With Front End Engineering and Design ("FEED") completed, Offtake has
now secured a key gating item on the way to achieve full financing of the
Villeta Project, Final Investment Decision ("FID") and start of construction
later this year

 

·    Validates ATOME's commercial proposition and leadership in the
production of renewable fertilisers

 

·   Supports ATOME's pipeline of projects with income generation and
operational profitability for Villeta targeted to commence in 2027

 

 

Olivier Mussat, ATOME CEO, commented:

 

"The entry into this strategic relationship with global crop nutrition leader
Yara is a significant milestone for ATOME on the path to realise our flagship
Villeta Project which will be one of the largest renewable fertiliser
production facilities in the Western Hemisphere. Proving significant off-taker
interest for our renewable product gives a clear path to the finalisation of
funding, FID and the commencement of work onsite at Villeta.

Importantly, it provides the confidence for ATOME to now accelerate the
development of its project pipeline, including the 300MW Yguazu project in
Paraguay and the 120MW Costa Rica projects.

"We are grateful for the work and the trust of the team at Yara and we look
forward to a long and mutually beneficial relationship."

 

Chrystel Monthean, EVP Americas at Yara, commented:

 

"Decarbonizing the food systems is at the forefront of our strategy. Many of
the food companies active in South America have committed to decarbonization
targets and our collaboration with them reveals that the decarbonization of
the production of fertilisers combined with the use of agronomical best
practices can significantly reduce the crops' carbon footprint. Signing the
Heads of Terms with ATOME for the Villeta project is a first step to open the
opportunity to further expand our portfolio with fertilisers produced with
renewable energy in the Americas. The fertilisers from Villeta will become
part of a new portfolio called Yara Climate Choice, including fertilisers
based upon renewable energy and carbon, capture and storage. The project's
in-land location could open logistical advantages for some of our growing
markets in Mercosur.

We are looking forward to developing a strategic long term relationship with
ATOME."

 

The Heads of Terms

 

Subject to the entry into a definitive agreement anticipated before the end of
Q4 this year, the Heads of Terms covers all of ATOME's Villeta production and
validates the commerciality of ATOME's business model reflecting both a price
protection mechanism for ATOME underpinned by current market rates, and a
premium upside sharing formula for ATOME's product pricing, whilst providing
Yara, over a long term, the supply of renewable fertiliser with a particular
emphasis on the growing Latin American markets.

 

Yara will work to maximise market potential and the premium value proposition
of the renewable product benefitting from Yara's extensive sales, marketing
and distribution network combined with decades of experience in global
markets.

 

 

Gateway to Final Investment Decision ("FID")

Offtake was a key gating item successfully crossed in order to proceed with
the next steps of finalising the funding for the project and deliver FID,
leading to the commencement of construction later this year. This significant
milestone follows on from the progress already achieved by ATOME including the
grant of Environmental and Operational licenses, obtaining Free Trade Zone
status at Villeta, necessary land acquisition, the FEED completion and the
bringing of EPC discussions to a point of readiness for pressing the green
button later this year.

 

In respect of the funding of Villeta, led by ATOME's international financial
advisors, Natixis CIB, the debt portion for the project is now nearly three
times covered by solid expressions of interest with substantive and
encouraging equity discussions with international players taking place and
moving to next stage of the process, all such being on a project level.

 

 

Investor Presentation via Investor Meet Company

 

Olivier Mussat, CEO of ATOME will provide a live presentation via Investor
Meet Company on Thursday 25 July 2024 at 11:00am BST relating to the
announcement on offtake and general business update.

 

The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up
until 09:00 BST, 25 July 2024, or at any time during the live presentation.
Investors who already follow ATOME PLC on the Investor Meet
Company platform will automatically be invited.

 

Investors can sign up to Investor Meet Company for free and add to
meet ATOME PLC via:

https://www.investormeetcompany.com/atome-plc/register-investor
(https://www.investormeetcompany.com/atome-plc/register-investor)

A copy of the the updated presentation along with a recording of the live
presentation via Investor Meet Company will be available on the Company's
website: https://www.atomeplc.com/ (https://www.atomeplc.com/)

 

 

For more information, please visit https://www.atomeplc.com
(https://www.atomeplc.com) or contact:

 

 ATOME PLC                                  +44 (0) 113 337 2210
 Nikita Levine, Investor Relations
info@atomeplc.com

 Beaumont Cornish (Nominated Adviser)       +44 (0) 20 7628 3396
 Roland Cornish, Michael Cornish
 SP Angel (Broker)                          +44 (0) 20 3490 0470
 Richard Hail, Caroline Rowe
 FTI Consulting (Strategic Communications)  +44 (0) 20 3727 1000

                                          atome@fticonsulting.com
 Elizabeth Adams, Ben Brewerton

 

 

 

About Yara International ASA

 

Yara's mission is to responsibly feed the world and protect the planet. Yara
pursues a strategy of sustainable value growth through reducing emissions from
crop nutrition production and developing low-emission energy solutions. Yara's
ambition is focused on growing a nature-positive food future that creates
value for its customers, shareholders and society at large and delivers a more
sustainable food value chain.

To drive the green transition in fertiliser production, shipping, and other
energy-intensive industries, Yara will produce ammonia with significantly
lower emissions. Yara provides digital tools for precision farming and work
closely with partners at all levels of the food value chain to share knowledge
and promote more efficient and sustainable solutions.

Founded in 1905 to solve the emerging famine in Europe, Yara has established a
unique position as the industry's only global crop nutrition company. With
18,000 employees and operations in more than 60 countries, sustainability is
an integral part of our business model. In 2023, Yara reported revenues of USD
15.5 billion.

 

About ATOME

 

ATOME PLC is an AIM listed company targeting green fertiliser production with
445-megawatt of projects in Paraguay and a further pipeline of potential
projects in Central America.

 

The first project is at Villeta in Paraguay. It benefits from a 145MW
renewable power purchase agreement and 30 hectares of land in a tax free zone.
Front End Engineering Design studies have been completed and Heads of Terms
signed with Yara, the leading international fertiliser company for offtake of
all of Villeta's production. The Company is now negotiating the project
finance with a view to closing that and declaring FID before end 2024. There
is a further 300MW of renewable power reserved for ATOME in Paraguay.

 

In Costa Rica, The National Ammonia Corporation S.A. was formed in 2022 with
local partner Cavendish S.A. based in Costa Rica to develop green fertiliser
projects for the region. As well as straddling the Pacific and Atlantic
Oceans, Costa Rica is a democratic Central American country. In agriculture,
Costa Rica is the second largest supplier of pineapples in the world and is in
the top ten banana growers.

 

All power for ATOME is from 100% renewable sources and all chosen sites are
located close to the power and water sources and export facilities to serve
significant domestic and then international demand.

 

The Company has a green-focused Board which is supported by major shareholders
including Peter Levine, Schroders, a leading fund manager, and Baker Hughes, a
global technology company operating in the energy and industry sectors.

 

MAR

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon publication of this announcement, this inside information is
now considered to be in the public domain. The person who arranged for the
release of this announcement on behalf of the Company was Peter Levine,
Chairman.

 

Other information

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

 

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