ATOME PLC (AIM:ATOM) shares could be worth more than three times their current price, that’s according to a 12-month price target set by stockbroker SP Angel.
The target is pitched at 170p compared to the current market price of 45p.
A ‘buy’ note published on Friday, following ATOME’s interim results, looks ahead to what’s expected to by a catalyst-laden phase for ATOME, with the anticipated final investment decision for the Viletta low-carbon fertiliser project, in Paraguay, chief among them.
SP Angel analysts highlighted the imminent finalisation of a long-term, 100% offtake agreement with Yara International as another key catalyst that could support a rerating of the share.
“We expect that visibility on long-term energy costs and strong projected regional demand will position Villeta Phase 1 as an advantaged green fertiliser project from a global perspective,”
Securing project financing arrangements in the coming months will be another, although many pieces of a deal are already in play.
“The company is now negotiating the project financing components, with debt expected to constitute at least 60% of the $630m of the total project funding required for construction, financing, transaction and supervision costs during the build period.
“ATOME expects to announce news regarding the constitution of the project equity club, led by Hy24, and of the debt consortium in the coming weeks, which should enable sanctioning of the project and commencement of site works at Villeta before end of this year.”
A busy summer
ATOME chief executive Olivier Mussat, in today’s interim results, commented: "The Villeta project is expected be the largest low-carbon fertiliser production facility in the world when it comes on stream.
"With news of signing the definitive offtake agreement with Yara, constitution of the Project equity club and of the multilateral lenders in the project financing expected in the coming weeks, we will then be well set to navigate our course for FID and commencement of construction by the end of the year".
"The team has been very busy over the summer and shareholders can now expect an increasing flow of market announcements as we move to the final phases towards FID."
In terms of its financials, ATOME, a pre-revenue company, reported a net loss of $2.50 million, in line with a $2.54 million loss a year ago. It capitalised some $6.60 million of costs related to its flagship Villeta low-carbon fertiliser project in Paraguay, and ended the half with $360,000 of cash.
Subsequently, in July, ATOME secured a provisional commitment of up to $135 million in senior debt from the European Investment Bank, and, agreed $50 million in concessional finance from the Green Climate Fund via the International Finance Corporation, part of the World Bank.
Looking ahead, ATOME's outlook would appear upbeat and expansive.
"With an exciting rest of the year in prospect and the culmination of what we have been working towards for the last 3 years we view the outlook for ATOME with growing confidence,” Mussat added.