Norway’s battery cell start-up Freyr is about to go public on the US stock exchange, again through merging with an already listed investment firm, Alussa Energy Acquisition Corporation (think SPAC).
Upon closing, the combined company will be renamed Freyr Battery and listed on NYSE under the new ticker symbol ‘FREY’. Following the Swedish company Northvolt, the start-up Freyr, is another Nordic company planning to build battery cell factories in the gigawatt range.
They expect to receive equity proceeds of approximately $850 million as part of the merger. This includes a $600 million PIPE at $10.00 per share of the Company with Koch Strategic Platforms and Glencore having already joined the investment. Koch Strategic Platforms is Koch Industries’ attempt to buy into new technology. Glencore too can be counted among the gas and oil industry. At the same time, the connection already reaped benefits for Freyr. The company announced on Twitter that they signed an LOI with Glencore to supply “up to 3,700 tonnes of high-grade sustainably-sourced cobalt metal cut cathodes produced at Nikkleverk, Glencore’s Norwegian operations”.
Freyr plans to install a battery cell production capacity of up to 43 GWh in four years. They hope to get 32 GWh online by 2023 as reported in August 2019 but before that said, they wanted to build what they called ‘fast-track production plants‘ with a capacity of 2 GWh per year with its local site partner Mo Industrial Park. In the recent announcement, these plans are missing.
Daniel Barcelo, Chief Executive Officer and Founder of Alussa Energy, did say, however, “Norway with its entrepreneurial cities like Mo i Rana provide a great foundation for Freyr’s Gigafactories.” He added that they had evaluated over 75 investment opportunities across the global energy and energy transition sectors before finding Freyr to stand out as a “frontline player”. The CEO also stressed the commitment to environmentally-friendly production, claiming they would build “one of the most environmentally friendly battery cells in the world”.
Torstein Dale Sjøtveit, Founder and Executive Chairman of Freyr, continued, saying its growth potential was enabled by “cutting-edge technology and access to clean, renewable energy.” Freyr undertakes to supply battery cells at more competitive prices than other suppliers and use energy from renewable sources.
In January, Freyr signed a licensing agreement with cell specialist 24M Technologies. The US American spin-off, formerly known as A123 develops what they call ‘semi-solid’ technology. The deal grants Freyr rights to unlimited battery cell production based on 24M’s current and all future technologies. In the recent announcement, Freyr considers the partnership strategy and expects it to “materially reduce manufacturing costs and provide a highly competitive market position.”
However, the recent investment can only be a beginning. Freyr estimated the required capital at 4.5 billion dollars or 40 billion crowns (4.5 billion US dollars or 3.4Bn euros). To start construction this year, they said they would need two billion dollars or 1.6 billion euros. After the merger, Fittingly, the pro forma equity value of the combined company would approximate $1.4 billion.
Further support may come from the first clients. Freyr already introduced Siemens Energy and Elkem as interested customers in October 2020. An memorandum of understanding is in place with both groups, covering cell delivery and the supply of anode active materials. For its part, Elkem plans to produce anode materials in Herøya Industrial Park as the MoU includes a joint commitment to develop and test new anode active materials.
Freyr Battery or Pubco’s common stock is expected to start trading on NYSE as FREY in the second quarter of 2021. Current shareholders will own approximately 30% of the combined company after transaction close. The boards of directors of both Alussa Energy and Freyr have approved the proposed business combination. It is now subject to the approval of their shareholders.
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