09. Dec 2021
Avantium N.V., a leading technology company in renewable chemistry, announces that it has taken a positive Final Investment Decision (FID) on the construction of its FDCA Flagship Plant.
The positive FID was taken after the Company fulfilled all three Key Conditions it had defined, which include securing sufficient financing, finalising the engineering and establishing the supply chain, and obtaining sufficient offtake commitments for the Flagship Plant. With the recent signing of a €90 million committed debt financing term sheet, the final outstanding financing condition has now been met.
Reaching this milestone marks a defining moment in the evolution of Avantium and will accelerate the commercialisation of PEF. Avantium’s FDCA Flagship Plant will be the world’s first factory to produce FDCA on a commercial scale, with a capacity of 5 kiloton per annum. FDCA is the key building block of the 100% plant-based, recyclable plastic material PEF which also has functional advantages compared with fossil fuel derived plastics. Avantium believes that the Flagship Plant, in addition to generating revenues and profits in its own right, will clearly demonstrate the viability of large-scale manufacturing of PEF to consumers, customers and partners. This should pave the way to dramatically expand the applications of PEF, with a potential total end-market of $200 billion per year, which Avantium intends to access by the provision of technology licenses to collaborators worldwide.
The positive Final Investment Decision concludes an intense phase during which Avantium worked diligently on satisfying the three key conditions it had defined as necessary to meet, prior to starting with the construction of its FDCA Flagship Plant: (i) securing sufficient financing; (ii) finalising the engineering and establishing the supply chain; and (iii) obtaining sufficient initial offtake commitments for the flagship plant. All three key conditions have now been met. To get to this point, Avantium has been actively seeking and building partnerships across the value chain – customers, suppliers, governments and financial partners.
Tom van Aken, Chief Executive Officer of Avantium, comments on the significance of this milestone: “We highly appreciate the trust our partners, and in particular a strong consortium of Dutch banks, place in our innovative technology to produce FDCA and PEF. By meeting the Key Conditions concerning the construction of our FDCA Flagship Plant, we have reached a pivotal point in our journey to commercialise the next-generation plant-based plastic PEF. Bringing a new plastic to the market is a remarkable feat. With the backing of all our stakeholders, our perseverance, efforts and drive are about to bear fruit. We are excited to be playing an important role in accelerating the transition to the circular economy while building value for our shareholders.”
Avantium has signed a term sheet for a three-year Debt Financing package of €90 million with a consortium of lenders, comprising the four Dutch banks ABN AMRO Bank, ASN Bank, ING Bank and Rabobank, as well as with the government backed Dutch impact investment fund Invest-NL. Each bank has committed €15 million as a bank loan under the Debt Financing. Invest-NL has committed €30 million debt under the Debt Financing. The €90 million Debt Financing is subject to terms and conditions, including the provision of warrants to the lenders.
Wouter Bos, CEO of Invest-NL, is excited about the investment: “Invest-NL is proud to financially support Avantium, together with four Dutch banks. This first-of-a-kind investment by this group of Dutch financial institutions illustrates how we can jointly shape the capital needs of innovative and sustainable companies. It truly proves that investments in green, disruptive technologies are possible. With this investment, Invest-NL commits itself to the ambitious mission of Avantium to bring the innovative, sustainable plastic material PEF to market, significantly contributing to the future of our planet.”
Andrew Bester, Head of ING Wholesale Banking, comments on behalf of the Dutch banks: “With this multidimensional financing solution for Avantium for the world's first FDCA Flagship Plant, the involved Dutch banks confirm their commitment to make a substantial contribution to the circular economy in the Netherlands. The Dutch banks joined forces with Invest-NL to realise this transaction. We wish the company and its shareholders success with the development of this Flagship Plant for the production of the sustainable plastic PEF."
The total financing package for the construction of the FDCA flagship plant consists of subsidiesi, third party equityii, Avantium equity and bank loans. Financing is subject to customary terms and conditions, including Financial Close. Avantium agreed to invest an additional €10 million in equity in its subsidiary Avantium Renewable Polymers in order to absorb the additional costs of the delay of one year in reaching Financial Close, bringing the total equity investment by Avantium in its subsidiary to €45 million. Worley and the Groningen Consortium (consisting of Groningen Seaports and regional investment funds NOM, FondsNieuweDoen, Investeringsfonds Groningen and Groeifonds) together will acquire a 22.6% shareholding in Avantium Renewable Polymers, representing a post-money valuation of €132.5 million. Following Financial Close, Avantium will hold 77.4% equity in Avantium Renewable Polymers.
Cas König, CEO of Groningen Seaports, is pleased to collaborate with Avantium to making the FDCA flagship plant a reality: “We are excited that Avantium has reached this important milestone for its FDCA Flagship Plant. Avantium’s commercial facility will significantly contribute to the development of sustainable and circular industrial cluster in the Northern region of the Netherlands, that is no longer dependent on fossil resources such as natural gas. This fits perfectly within our Chemport Europe ecosystem where we work together towards a shared ambition: changing the nature of chemistry.”
Dina Boonstra, director of regional investment funds NOM (Investment and Development Agency for the Northern Netherlands), Investeringsfonds Groningen and Groeifonds, adds: “The Investment Funds of the Groningen Consortium are excited to support Avantium, enabling Avantium to scale up and commercialise its innovative, breakthrough technology to produce the plant-based plastic material PEF. The production of biobased plastics fits well in the focus and strategy of the Northern Netherlands and we are therefore pleased to welcome Avantium in our region.”