Fund raise of approximately £18.4 million for Velocys plc

Velocys plc (VLS.L), the renewable fuels company, is pleased to announce that it intends to raise approximately £18.4 million (gross) by way of a firm placing and placing and open offer.


  • Fund raising of approximately £18.4 million (before expenses):
    • Approximately £14 million (before expenses) by way of a firm placing of 139,605,000 New Ordinary Shares (the “Firm Placing Shares”) at a placing price of 10 pence per share (the “Placing Price”) (the “Firm Placing”); and
    • £4.4 million (before expenses) by way of an open offer (the “Open Offer”) made to Eligible Shareholders of 44,057,946 New Ordinary Shares (the “Open Offer Shares”) at the Placing Price.
    • Both the Firm Placing and the Placing and Open Offer are strongly supported by existing Shareholders. Approximately half of the Firm Placing Shares have been placed with the Company’s existing Shareholders. In addition, all of the Open Offer Shares have been conditionally placed with two of the Company’s existing Shareholders, Henderson and Lansdowne, subject to clawback to satisfy valid acceptances by Eligible Shareholders under the Open Offer (the “Placing and Open Offer” and, together with the Firm Placing, the “Capital Raising”).
  • The Placing Price represents a discount to the closing mid-market price of the Ordinary Shares as at 12 January 2018 of 17.25 pence per Ordinary Share.
  • The Firm Placing Shares will represent approximately 42.2 per cent. of the Enlarged Share Capital (provided that no options, warrants or convertible loan notes are
    exercised). The Firm Placing Shares are not subject to clawback and are not part of the Open Offer.
  • The Open Offer Shares will represent approximately 13.3 per cent. of the Enlarged Share Capital (provided that no options, warrants or convertible loan notes are exercised).
  • Net proceeds of the Capital Raising will be used predominantly: (i) towards funding initial development costs in respect of the Company’s Mississippi biorefinery while the Company pursues strategic investment for development costs and the project capex; (ii) to progress the Company’s UK waste-to-renewable jet fuel project; and (iii) to fund the Company’s working capital and central operating costs, including additional support to ENVIA until it reaches sustainable profitability expected in the second quarter of 2018.
  • The Capital Raising is conditional (amongst other things) upon the passing of certain resolutions. A General Meeting is being convened for the purpose of considering the relevant resolutions at 10.00 a.m. on 31 January 2018 at the offices of Mayer Brown International LLP, 201 Bishopsgate, London, EC2M 3AF. Neither the Firm Placing nor the Placing and Open Offer is being underwritten by Numis Securities or Canaccord Genuity.

David Pummell, CEO of Velocys, said:

“We now have our commercial scale technology in operation at ENVIA Oklahoma and have made considerable progress in 2017 taking forward our new strategy to enter the renewable 940907317.6 fuels markets and grow material supply positions. Today’s financing ensures Velocys can take forward both the development of our second biorefinery in the US, targeting final investment decision around the middle of 2019 and completing the feasibility study for the third biorefinery in the UK.

We would like to thank existing shareholders for their support and welcome some significant new shareholders to the register. We are also pleased to include an open offer element that allows shareholders who are resident in the United Kingdom to participate.”

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