ATOME PLC (AIM:ATOM) this week struck a $100mln project funding deal, with Hy24, teeing up a larger financing to deliver its Villeta green fertiliser project, in Paraguay.
CEO Olivier Mussat joined the Proactive studio and told us that the partnership with Hy24 represents an important catalyst on ATOME’s road to a final investment decision (FID), particularly in securing both equity and debt financing.
Here were look more closely at what was said.
Proactive: Olivier, very good to speak with you. Could you tell us how significant is this proposed investment from Hy24 for ATOME?
Olivier Mussat: So significant, very much so. I think it's one of these other catalysts that we are going through on our road to final investment decision (FID).
It's significant on a number of points, but I think the first one, as far as what people are concerned, obviously it's all about financing the project. We talked about the debt.
Coming into place very nicely with a lot of support from the DFIs, from the banking community. So as we are hitting all of the right marks of food security, and climate, but you needed the equity as well to come in the project.
We've always said that Valetta and our projects will be financed at SPV level, right at only low financing structure.
So bringing in equity into a project is absolutely crucial. And of course, it's large amounts.
So Hy24 itself, it's extremely significant because after a pretty long process to find the right partner, we got to learn more about Hy24, about the team, about the capacity and to see that also they understood and believed in ATOME in what we were doing in our projects.
For us, it's significant on a personal level, of course, because when the largest investor in the hydrogen sector finally signs on the dotted line, it's a good validation.
But also, it's an important validation on the debt side as well.
We're not quite there yet, but it's certainly one of these terribly important catalysts that needed to happen. And has happened.
Proactive: What value will Hy24 bring to the project?
Olivier Mussat: So I think the value that they bring, if you look at Hy24, it's their expertise of course, their capital, their ability to mobilize also further capital because they are that credible.
That's why we are the anchor and the lead investor. So we've been speaking to a number of investors around. And obviously, we know that they will fit very comfortably together in the project with us.
So for us, we see a private equity fund which is invested in arguably all of the larger projects in the hydrogen space across sectors. You have e-fuels, mobility, and green steel. And typically with, let's say, much larger companies than us, right?
So for us, clearly, you know, it is significant. It's also significant that they bring also that much extra credibility for the success of the project.
Proactive: What are the next steps to reach final investment decision (FID), Olivier?
Olivier Mussat: So I think the next steps. Obviously, this is one of the very important catalysts along the way, which is now all of the other contracts that we had announced before.
VPC, the offtake agreements, the financing, putting together, now is the time to basically finalize with full form contracts.
Commercial terms are fully agreed. But of course, we go from 20 pages to more than a few hundred pages.
And this process is also going on its course and finishing its course pretty quickly. So you will see the announcements on finalizing EPC, on finalizing offtake and so on for the Villeta project.
We're doing it from a position of comfort that we know that the Villeta project has been assigned a value to ATOME shareholders, not insignificant at a minimum of $60 million.
So that's fab. And of course, we are looking at other things as far as the future growth of ATOME, but it's all about closing and delivering Villeta.
Proactive: And ATOME’s priorities for 2025?
Olivier Mussat: So ATOME’s priority for 2025 is totally closing Villeta.
Obviously, now we have a shareholder which is with us who is also very keenly interested in delivering the project as quickly as possible so that we can start construction, and we then have, we go from the road to FID to the road to production.
And of course, as you know, they are now with us. They want to see other projects coming through to be able to co-invest with us in these projects. So it's all about building the pipeline of interesting projects.
Obviously, we've talked about Yguazu, we've talked about Costa Rica, we've been approached also by a number of other developers who are looking and who have who are maturing their projects and don't maybe have the capacity that we have as a management team to build them, and to bring them to an FID stage.
So clearly for us, it's all about delivering the project and then delivering the growth of ATOME for the shareholders.
Proactive: Olivier, I hope you'll keep us posted on any progress with that. Thank you very much for speaking with us today.