RCS - Loop Industries - Loop Industries & Reed Management Sign Agreement
31/05/2024 08:15
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RNS Number : 5562Q Loop Industries 30 May 2024
Loop Industries and Reed Management Sign Agreement for €35 Million Financing
for Global Commercialization of the Infinite Loop(TM) Technology and To Form
French Joint Venture
· LOOP AND REED MANAGEMENT SAS ("REED") SIGN AGREEMENT FOR €35
MILLION IN FINANCING TO CONTRIBUTE TO THE GLOBAL COMMERCIAL ROLLOUT OF THE
INFINITE LOOP™ TECHNOLOGY
· LOOP AND REED TO FORM JOINT VENTURE TO COMMERCIALIZE LOOP'S
TECHNOLOGY ACROSS EUROPE
· PARTNERSHIP IN LINE WITH LOOP'S STRATEGY OF DEPLOYING CAPITAL IN
LOW-COST MANUFACTURING COUNTRIES SUCH AS INDIA AND HAVE A MORE ASSET-LIGHT
MODEL FOCUSED ON LICENSING ITS TECHNOLOGY IN HIGHER COST COUNTRIES
MONTREAL, QC / ACCESSWIRE / May 30, 2024 / Loop Industries, Inc. (NASDAQ:LOOP)
(the "Company," "Loop," "we," "us," or "our"), a clean technology company
whose mission is to accelerate a circular plastics economy by manufacturing
100% recycled polyethylene terephthalate ("PET") plastic and polyester fiber,
today announced that the Company and Reed, a European investment firm focused
on high impact and technology-enabled infrastructure, have signed definitive
binding agreements, subject to certain closing conditions, for an investment
of €35 million from Reed to fund the global commercialization of the
Infinite Loop™ technology and have agreed to form a 50/50 joint venture for
the European deployment of Loop's technology.
The signing of this agreement occurred subsequent to the Company's fourth
quarter and full fiscal year 2024 financial release and 10-K filing and is
therefore being announced separately as a further update to these filings.
Under the terms of the agreement, which has been signed following the
completion by Reed of extensive operational, technical, ESG, and legal due
diligence, Reed will provide capital as follows:
· €10M investment in a Convertible Preferred Security to be
issued by Loop, which contains a 13% PIK dividend rate and 5-year term;
· €25M loan to Loop in two equal tranches - first tranche to
support global deployment opportunities paid at closing and second tranche to
support European deployment opportunities paid in the following 12 months with
both tranches having a 13% PIK interest rate and 3-year term;
Loop is also concurrently negotiating financing with a governmental agency in
order to complete the Company's required financing for its planned monomer
facility in India.
The closing of the transaction is subject to the fulfillment of certain
closing conditions, principally the conditions that (i) Reed shall have
successfully completed its first capital raising for its fund; and (ii) Loop
shall have received a binding financing commitment from a governmental agency.
The Company understands that Reed's funding negotiations are progressing well.
The Company also believes that its process to obtain the government funding is
advancing positively. While there can be no assurance that the abovementioned
closing conditions will be met, the Company currently anticipates that the
transaction should close by the end of the second quarter of the current
fiscal year.
Julien Touati, CEO of Reed, commented saying: "We are convinced at Reed that
tackling global sustainability issues such as plastic pollution requires
scaling up the best technologies globally and applying them to large-scale
capital-intensive projects locally. Our partnership with Loop Industries is a
fantastic illustration of how this approach comes into play. After months of
active engagement, we have been more than impressed with Loop management's
vision as well as the reliability and versatility of Loop's technology. We
will serve as a trusted partner for European expansion and are deeply honored
to support Loop's scale up in an active manner alongside Daniel and his team."
Daniel Solomita, Founder and CEO of Loop Industries, commented saying: "We are
thrilled to form this strategic partnership with Reed, this partnership
enhances our strategy of deploying capital in low-cost manufacturing countries
such as India and focus more on an asset-light licensing model in higher cost
countries such as in western Europe. In addition to providing the capital
required for Loop's equity commitment in India, this partnership also brings
strategic support from Reed's experienced leadership thanks to their in-depth
industry experience as well as their established relationships with major
financial institutions."
About Loop Industries
Loop Industries is a technology company whose mission is to accelerate the
world's shift toward sustainable PET plastic and polyester fiber and away from
our dependence on fossil fuels. Loop Industries owns patented and proprietary
technology that depolymerizes no and low-value waste PET plastic and polyester
fiber, including plastic bottles and packaging, carpets and textiles of any
color, transparency or condition and even ocean plastics that have been
degraded by the sun and salt, to its base building blocks (monomers). The
monomers are filtered, purified and polymerized to create virgin-quality
Loop™ branded PET resin suitable for use in food-grade packaging and
polyester fiber, thus enabling our customers to meet their sustainability
objectives. Loop™ PET plastic and polyester fiber can be recycled infinitely
without degradation of quality, successfully closing the plastic loop. Loop
Industries is contributing to the global movement towards a circular economy
by reducing plastic waste and recovering waste plastic for a sustainable
future.
Common shares of the Company are listed on the NASDAQ Global Market under the
symbol "LOOP."
For more information, please visit www.loopindustries.com
(https://pr.report/p5gkSAyt) . Follow Loop on Twitter: @loopindustries,
Instagram: loopindustries, Facebook: Loop Industries and LinkedIn: Loop
Industries
Forward-Looking Statements
This news release contains "forward-looking statements" as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Such statements may be
preceded by the words "intends," "may," "will," "plans," "expects,"
"anticipates," "should," "could," "projects," "predicts," "estimates," "aims,"
"believes," "hopes," "potential" or "continue," the negative of such terms or
similar words. These forward-looking statements include, without limitation,
statements about Loop's market opportunity, its strategies, ability to improve
and expand its capabilities, competition, expected activities and expenditures
as Loop pursues its business plan, the adequacy of its available cash
resources, regulatory compliance, plans for future growth and future
operations, the size of Loop's addressable market, market trends, and the
effectiveness of Loop's internal control over financial reporting.
Forward-looking statements are not guarantees of future performance, are based
on certain assumptions and are subject to various known and unknown risks and
uncertainties, many of which are beyond Loop's control, and cannot be
predicted or quantified and consequently, actual results may differ materially
from those expressed or implied by such forward-looking statements. Such risks
and uncertainties include, without limitation, risks and uncertainties
associated with among other things: (i) commercialization of our technology
and products, (ii) our status of relationship with partners, (iii) development
and protection of our intellectual property and products, (iv) industry
competition, (v) our need for and ability to obtain additional funding
relative to our current and future financial commitments, (vi) engineering,
contracting, and building our manufacturing facilities, (vii) our ability to
scale, manufacture, and sell our products in order to generate revenues,
(viii) our proposed business model and our ability to execute thereon, (ix)
the ability to obtain the necessary approvals or satisfy any closing
conditions in respect of any of our proposed partnerships, (x) our joint
venture projects and our ability to recover certain expenditures in connection
therewith, (xi) adverse effects on the Company's business and operations as a
result of increased regulatory, media, or financial reporting scrutiny,
practices, rumors, or otherwise, (xii) disease epidemics and other
health-related concerns and crises, which could result in reduced access to
capital markets, supply chain disruptions and scrutiny, embargoing of goods
produced in affected areas, government-imposed mandatory business closures and
any resulting furloughs of our employees, government employment subsidy
programs, travel restrictions or the like to prevent the spread of disease, or
market or other changes that could result in non-cash impairments of our
intangible assets, and property, plant and equipment, (xiii) the effect of the
continuing worldwide macroeconomic uncertainty and its impacts, including
inflation, market volatility and fluctuations in foreign currency exchange and
interest rates, (xiv) the outcome of any U.S. Securities and Exchange
Commission ("SEC") investigations or class action litigation filed against us,
(xv) our ability to hire and/or retain qualified employees and consultants,
(xvi) other events or circumstances over which we have little or no control,
and (xvii) other factors discussed in Loop's Annual Report on Form 10-K for
the fiscal year ended February 29, 2024 filed with the SEC and in Loop's
subsequent filings with the SEC. More detailed information about Loop and the
risk factors that may affect the realization of forward-looking statements is
set forth in Loop's filings with the SEC. Investors and security holders are
urged to read these documents free of charge on the SEC's web site at
http://www.sec.gov. Loop assumes no obligation to publicly update or revise
its forward-looking statements as a result of new information, future events
or otherwise.
For More Information:
Investor Relations:
Kevin C. O'Dowd, Investor Relations
Loop Industries, Inc.
+1 617-755-4602
kodowd@loopindustries.com (mailto:kodowd@loopindustries.com)
Media Inquiries:
Andrea Kostiuk, VP Marketing & Communications
Loop Industries, Inc.
+1 (450) 951-8555
akostiuk@loopindustries.com (mailto:akostiuk@loopindustries.com)
SOURCE: Loop Industries, Inc.
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