ATOME PLC (AIM:ATOM) has taken an important forward step, potentially de-risking its Viletta green fertiliser project with an agreement for at least $100 million of project funding.
In a heads of terms agreement with Hy24, through its Clean H2 Infra Fund, will be the anchor and lead equity investor in a funding round targeting $115 million – with the fund committing to a minimum of $100 million.
The equity investment is at the asset level, and the deal effectively values ATOME’s net interest in the project at $60 million.
ATOME will maintain the day-to-day management and operational responsibility of the Villeta Project.
The agreement also envisages that Villeta receive a total funding package of $625 million, with at least 60% coming via debt financing.
“The potential entry of a reputable and well-funded partner to anchor the equity consortium will support both the debt and equity funding processes, as well as benefitting from its deep industry expertise to accelerate project development,” analysts at SP Angel said in a note.
The stockbroker called it a positive update that removes part of the near-term funding risk.
SP Angel added: “While the market remains cautious ahead of FID at Villeta, we note that ATOME’s implied see-through valuation is in line with the $58.5 million value we attribute to the Phase 1 Villeta project as part of our 200p per share risked NAV (net asset value) for the company.”
Advancing to FID
Today’s preliminary agreement with Hy24 is expected to progress to definitive documentation, alongside other equity investors in Villeta, during the second quarter – with a final investment decision, including debt financing commitments, before the end of the first half of 2025.
“We welcome Hy24, a worldwide leader in hydrogen private equity finance, as an anchor equity investor and are excited to bring the project to full financial close in the first half of this year,” chief executive Olivier Mussat said in a statement on Thursday.
“The Hy24 team has demonstrated deep industry expertise that will accelerate our project development.
“This demonstrates the substantial value in ATOME's business model of developing shovel-ready projects that combine market offtake and strong financial returns with significant development impact, backed by our proven management expertise."
A project to “significantly enhance food security”
Hy24 chief executive Pierre-Etienne Franc, meanwhile, added: “This marks Hy24's first step toward a potential direct investment in the region through our Clean H2 Infra Fund.
“We are committed to supporting the most promising project developers who contribute to providing cleaner alternatives.
“ATOME's Villeta project stands as one of South America's most advanced green fertiliser initiatives, driven by Paraguay's exceptional renewable resources, a highly experienced team that has effectively advanced the project's development, and strong offtake potential within the Mercosur region.
“Villeta has the capacity to significantly enhance the region's food sovereignty."