Loop Industries made the following announcements: The company has entered into an agreement to sell all of its remaining property in Becancour, Quebec for $13.9M. The sale transaction is expected to close on February 24, 2023, subject to final due diligence and fulfillment of certain customary closing conditions. The company has significantly curtailed operations at its Terrebonne, Quebec production facility. This facility was constructed primarily to demonstrate that Loop‘s breakthrough depolymerization technology was scalable and to produce commercial quantities of virgin quality PET resin and polyester fiber for global brands. The technology is now proven at scale. The company will continue to honor its existing sales contracts, while reducing production capacity. Based on the combination of the proceeds of the land sale and the operating cost reduction initiatives at Terrebonne, the company projects to have cash on hand of approximately $33.1M at the end of the current fiscal year ending February 28, 2023 and an annual cash burn of approximately $12.5M, therefore providing close to three years of liquidity, without incurring further equity dilution to finance ongoing operating activities. The company will for now focus its commercialization strategy on its planned projects with SKGC in Asia and Europe. These joint venture projects have a lower requirement for Loop equity investment and higher return on capital, and leverage SKGC’s engineering and operational infrastructure. In addition, the joint venture projects will provide Loop with an annual technology licensing fee. SKGC is committed to commercializing Loop’s technology as the underpinning of its sustainable plastics strategy. Loop is working collaboratively with SKGC to put in place the financing plan for the rollout of large-scale manufacturing in Asia and Europe, including the first Asian manufacturing facility in Ulsan, South Korea, which is planned to break ground in 2023. Although the company is currently focusing on developing the planned joint venture facilities in Asia and Europe, a future facility in Quebec remains an option at the appropriate time, and possible alternative locations for such a facility are available.
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