Velocys announces agreement with Foresight on Altalto plant site
March 25, 2022
BY Velocys
Velocys plc, the sustainable fuels technology company, announces that further to the notification of Dec. 17. 2021, Altalto Immingham Ltd, a subsidiary of Velocys, has sold its 100 percent interest in Rula Developments (Immingham) Limited, as planned. RDIL owns the site for the proposed Altalto waste-to-sustainable-fuel project, which is being developed in collaboration with British Airways.
RDIL has been sold to funds managed by Foresight Group LLP, for £9.75 million, with a call option for Altalto to re-purchase RDIL within three years. The Call Option will require Altalto, and any new project partners, to pay up to £12.95 million in aggregate over the option period (the majority of which relates to a final payment in the event of exercise of the Call Option).
In addition, and subject to exercise of the Call Option, Altalto has agreed to grant Foresight a right of first refusal to invest up to £100 million in the project, alongside British Airways and other future investors, once the full funding is required.
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Foresight brings a proven track record and history of investing in energy transition infrastructure. Following the sale, the Project has retained the right to access the land for maintenance and pre-development activities associated with its existing planning permission. Commencement of construction remains subject to further clarification of government policy support for such projects.
This agreement follows on from the Prior Announcement, when Altalto exercised an option to acquire a 100% interest in RDIL with an initial part-payment of £2.5 million and deferred consideration. The deferred consideration payable is £7.25m, which will now be settled as part of this transaction, thereby satisfying all obligations under the historic option agreement.
Henrik Wareborn, CEO of Velocys, said, “Velocys is pleased to have Foresight involved in the Altalto project, alongside British Airways. This is a further step in bringing our SAF enabling technology solution to market.
“The Velocys technology pathway utilizes domestic non-fossil feedstocks from sustainable carbon sources which have no alternative use, such as municipal solid waste and forestry residue. Sustainable aviation fuel has the same composition as conventional jet fuel, is globally approved and is suitable for immediate use. We firmly believe our technology will play a key role in helping to decarbonize the aviation sector, meet net zero targets, and improve the energy and fuel security of the UK.”
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David Hughes, CIO of Foresight, said, “Foresight is delighted to become involved in the Altalto project through the acquisition of the proposed site. The Project is consistent with our aims of investing in sustainable businesses that are looking to advance the energy transition.”
Sean Doyle, chairman and CEO of British Airways, said, “It’s great to have Foresight with us to help deliver the Altalto project, as we make our way on our journey towards net zero by 2050. The development of sustainable aviation fuel is an important part of our near to medium-term plan to decarbonise, alongside carbon capture technology. We believe the UK can be a world leader in this, and it’s crucial we work with both private industry and Government to drive forward this ambitious and hugely important work.”
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