Exercise of option over Altalto project site
17 Dec 2021
Velocys plc (AIM: VLS), the sustainable fuels technology company, today announces that further to the announcement of 25 November 2021 and following completion of the fundraising, Altalto Immingham Ltd (“Altalto”) (a subsidiary of Velocys) has exercised an option agreement to acquire Rula Developments (Immingham) Limited (“RDIL”) with an initial part-payment of £2.5 million. RDIL owns the site of the proposed Altalto project, near Immingham in North East Lincolnshire, which is being jointly developed by British Airways PLC (“BA”) and Velocys.
Pursuant to the agreement, the total consideration to acquire the site is being satisfied by a £2.5 million part-payment, funded through an inter-company loan from Velocys to Altalto. A further deferred consideration amount of up to £8.5 million is payable by 30 September 2022. As previously announced, Velocys is discussing the onward purchase of RDIL (and subsequent grant back to Altalto of a future option to purchase RDIL within 3 years) with a third party with the intention that the purchase price for RDIL paid by the third party will cover the remaining consideration payable by Altalto in 2022.
Detailed engineering for the Altalto project is expected to commence in 2023. Financial close is expected in 2024, with construction of the plant being targeted to commence in 2024 and to be completed by mid-2026, following which commissioning and start-up will commence, with full scale commercial operation expected in 2027.
This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation 596/2014/EU (MAR).
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Director of Communications & Sustainability
+44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint Broker)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
Hugh Rich (Corporate Broking)
+44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
Liam Zabludowicz (Corporate Advisory)
+44 20 7408 4090
Buchanan (Financial PR)
+44 20 7466 5000
Radnor Capital (Investor Relations)
+44 20 3897 1830
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 in the US and UK (Bayou Fuels and Altalto) 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.