REG - Velocys PLC - Sale and purchase option agreed for Altalto site

VelocysAnnouncement

24/03/2022 07:01

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RNS Number : 8290F  Velocys PLC  24 March 2022

24 March 2022

 

Velocys plc

 

("Velocys" or the "Company")

 

Sale and purchase option agreed over Altalto Project site with Foresight Group
LLP

 

 

Velocys plc (AIM: VLS), the sustainable fuels technology company, announces
that further to the notification of 17 December 2021 ("Prior Announcement"),
Altalto Immingham Ltd ("Altalto"), a subsidiary of Velocys, has sold its 100%
interest in Rula Developments (Immingham) Limited ("RDIL"), as planned. RDIL
owns the site for the proposed Altalto waste-to-sustainable-fuel project,
which is being developed in collaboration with British Airways.

 

RDIL has been sold to funds managed by Foresight Group LLP ("Foresight"), for
£9.75 million, with a call option for Altalto to re-purchase RDIL within
three years ("Call Option"). The Call Option will require Altalto, and any new
project partners, to pay up to £12.95 million in aggregate over the option
period (the majority of which relates to a final payment in the event of
exercise of the Call Option).

 

In addition, and subject to exercise of the Call Option, Altalto has agreed to
grant Foresight a right of first refusal to invest up to £100 million in the
project, alongside British Airways and other future investors, once the full
funding is required.

 

Foresight brings a proven track record and history of investing in energy
transition infrastructure. Following the sale, the Project has retained the
right to access the land for maintenance and pre-development activities
associated with its existing planning permission. Commencement of construction
remains subject to further clarification of government policy support for
such projects.

 

This agreement follows on from the Prior Announcement, when Altalto exercised
an option to acquire a 100% interest in RDIL with an initial part-payment of
£2.5 million and deferred consideration. The deferred consideration payable
is £7.25m, which will now be settled as part of this transaction, thereby
satisfying all obligations under the historic option agreement.

 

Henrik Wareborn, CEO of Velocys, said:

 

"Velocys is pleased to have Foresight involved in the Altalto project,
alongside British Airways. This is a further step in bringing our SAF enabling
technology solution to market.

 

"The Velocys technology pathway utilises domestic non-fossil feedstocks from
sustainable carbon sources which have no alternative use, such as municipal
solid waste and forestry residue.  Sustainable aviation fuel has the same
composition as conventional jet fuel, is globally approved and is suitable for
immediate use. We firmly believe our technology will play a key role in
helping to decarbonise the aviation sector, meet net zero targets, and improve
the energy and fuel security of the UK."

 

David Hughes, CIO of Foresight, said:

 

"Foresight is delighted to become involved in the Altalto project through the
acquisition of the proposed site. The Project is consistent with our aims of
investing in sustainable businesses that are looking to advance the energy
transition."

Sean Doyle, Chairman and CEO of British Airways, said:

 

"It's great to have Foresight with us to help deliver the Altalto project, as
we make our way on our journey towards net zero by 2050. The development of
sustainable aviation fuel is an important part of our near to medium-term plan
to decarbonise, alongside carbon capture technology. We believe the UK can be
a world leader in this, and it's crucial we work with both private industry
and Government to drive forward this ambitious and hugely important work."

 

 

Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014)
prior to its release as part of this announcement.

 

---------

For further information, please contact:

 Velocys                                                            +44 1865 800821

 Henrik Wareborn, CEO

 Andrew Morris, CFO

 Lak Siriwardene, Director of Communications & Sustainability

 Panmure Gordon (UK) Limited (Nomad and Joint Broker)               +44 20 7886 2500

 Hugh Rich (Corporate Broking)

 Emma Earl (Corporate Finance)

 John Prior (Corporate Finance)

 Shore Capital Stockbrokers Limited (Joint Broker)                  +44 20 7408 4090

 Henry Willcocks (Corporate Broking)

 Toby Gibbs (Corporate Advisory)

 James Thomas (Corporate Advisory)

 Liam Zabludowicz (Corporate Advisory)

 Radnor Capital (Investor Relations)                                +44 20 3897 1830

 Joshua Cryer

 Iain Daly

 Buchanan (Financial PR)                                            +44 20 7466 5000

 Helen Tarbet

 Simon Compton

 

 

Notes to Editors

 

Velocys is an LSE-listed, international sustainable fuels technology company,
traded on the AIM, providing clients with a technology solution to enable the
production of negative Carbon Intensity synthetic, drop-in fuels from a
variety of waste materials. SAF ('Sustainable Aviation Fuel') is the only
commercially available, permanent alternative to fossil aviation fuels.

The technology is IP-protected in all major jurisdictions.

Two reference projects (Altalto, UK, and Bayou Fuels, US) are designed to
accelerate the adoption and standardise the Velocys proprietary Fischer
Tropsch (FT) technology with an integrated end to end solution, including
renewable power and carbon sequestration. Velocys is enabling commercial scale
SAF production in response to the clean energy transition.

Velocys technology pathway is enabling the next generation of low carbon
sustainable fuels with significant additional positive air quality impacts.

www.velocys.com (http://www.velocys.com)

 

Foresight Group Holdings Limited

 

Foresight Group was founded in 1984 and is a leading infrastructure and
private equity investment manager, operating from 12 offices across six
countries in Europe and Australia with AUM of c. £8.4 billion as at 31
December 2021. With a long-established focus on ESG and sustainability-led
strategies, it aims to provide attractive returns to its institutional and
private investors from hard-to-access private markets. Foresight Group manages
over 300 infrastructure assets with a focus on solar and onshore wind assets,
bioenergy and waste, as well as renewable energy enabling projects, energy
efficiency management solutions, social and core infrastructure projects and
sustainable forestry assets. Its private equity team manages eight regionally
focused investment funds across the UK, supporting over 120 SMEs.  Foresight
Group listed on the Main Market of the London Stock Exchange in February 2021.
www.fsg-investors.com (http://www.fsg-investors.com)

 

British Airways

 

As a global airline and the UK's flag carrier, British Airways has been flying
its customers to where they need to be for more than 100 years.

The airline connects Britain with the world and the world with Britain,
operating one of the most extensive international scheduled airline route
networks together with its joint business, codeshare and franchise partners.

British Airways flies to destinations in more than 65 countries. Its
principal place of business is London, with its main home at Heathrow Terminal
5.

In 2021, the airline won six Business Traveller Awards including Best
Short-Haul Carrier, Best Airport Lounge, Best Frequent Flyer Programme, Best
Travel App and Best New Seat.

In September 2021, British Airways launched its sustainability programme, BA
Better World, committing to put sustainability at the heart of everything it
does and with a clear roadmap to achieve net zero carbon emissions by 2050.

British Airways is a founding member of the airline alliance oneworld, which
serves around 1,000 destinations across the globe. www.britishairways.com
(http://www.britishairways.com)

 

 

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