Sunfire GmbH announces signficant new funding

HydrogenOne Capital Growth PLC

05 March 2024

 

LEI: 213800PMTT98U879SF45

5 March 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

HydrogenOne Capital Growth plc 

('HydrogenOne' or the 'Company')

Sunfire GmbH announces significant new funding; non-material change to investment policy

HydrogenOne Capital Growth plc, the first London-listed fund investing in clean hydrogen for a positive environmental impact, is pleased to note that portfolio company Sunfire GmbH ('Sunfire') has announced a successful equity funding round, part of a wider funding package totalling more than EUR 500 million. This success of this round underscores both the Company's strategy of backing the leading innovators in the hydrogen industry, and its valuation of Sunfire.

The Company's Investment Adviser, HydrogenOne Capital LLP, believes this is a significant financial milestone for Sunfire, with EUR 215 million raised in a Series E equity financing round, further complemented by a term loan of up to EUR 100 million provided by the European Investment Bank ('EIB'). In addition, Sunfire has access to circa EUR 200 million from previously approved, undrawn grant funding to support its growth. The transaction is subject to customary regulatory approvals and is expected to close in Q2 2024. This makes Sunfire one of the best capitalised electrolyzer manufacturers in the industry.

Sunfire is an industry leader in alkaline and solid oxide electrolyser manufacture.  Sunfire is expanding its alkaline electrolysis production capacity at Solingen and Limbach-Oberfrohna, Germany and developing advanced research facilities in Dresden. Sunfire's pressurised alkaline and high-temperature solid oxide electrolysis technologies have the potential to become key enablers of the transition to renewable energy, offering a scalable and efficient means of producing green hydrogen. Accordingly, Sunfire targets installing several gigawatts of electrolysis equipment by 2030 in large-scale green hydrogen projects, securing a leading position in the fast-growing global electrolyzer market.

Non-material change to the Company's investment policy

On 18 October 2021 the Company announced that it had entered into agreements to invest £20.2 million in Sunfire, representing 19.6% of the Company's GAV at that time. The agreements included certain rights for the Company to make follow-on, anti-dilution, investments in Sunfire. At 31 December 2023, HydrogenOne's valuation of its investment in Sunfire was £27.1 million, representing 20.4% of the Company's gross asset value ('GAV'). Sunfire's revenues have expanded ten-fold since the Company's initial investment in 2021, and continue to anticipate a robust growth trajectory. The Company has exercised its rights to make a follow-on investment of £0.3 million in Sunfire as part this funding round (the 'Additional Sunfire Investment'), which mitigates the potential impact of dilution by leaving the Company's stake in Sunfire unchanged.

The Company's investment restrictions, forming part of its investment policy, require it to invest and manage its assets in a way which is consistent with its objective of spreading investment risk. In respect of investments in private hydrogen assets, no single private hydrogen asset will account for more than 20% of the Company's GAV (assessed at the time of investment).

In order for the Company to make the Additional Sunfire Investment, the Board has resolved to make a non-material modification to the Company's investment restrictions. Investments in Sunfire, measured at the time of investment, shall not exceed 21% of the Company's GAV. The Company's investment policy, including restrictions relating to all other investments, shall remain unchanged. The Company's investment restrictions shall continue to require it to invest and manage its assets in a way which is consistent with its object of spreading risk.

Dr JJ Traynor, Managing Partner of HydrogenOne Capital LLP, commented: "Sunfire was HydrogenOne's first investment, made in 2021, underscoring our conviction in the key role of electrolysis in the energy transition. The funding announced today puts Sunfire on a firm footing to build out its capacity and profitability".

Nils Aldag, CEO of Sunfire said: "This substantial financing round is good news for Europe's leading role in hydrogen production and for the European clean-tech industry. I am delighted to welcome additional investment, backing our vision, product offering, and capabilities to deliver industrial electrolyzers at pace and scale. With this new capital, we are uniquely positioned to further accelerate our company's growth and industrialisation plans to meet the fast-growing demand for electrolysis technologies."

Nicola Beer, Vice President European Investment Bank: "To make the green transition work for energy intensive industries, the development of a green hydrogen business environment is crucial. Scalable, reliable and efficient electrolyzers are a cornerstone. Therefore, we at the EIB are happy to support Sunfire's innovative technology."

- Ends -

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014, as it forms part of UK domestic law ("MAR"). Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR. The person responsible for arranging the release of this announcement on behalf of the Company is HydrogenOne Capital LLP.

Notes

For further information, please visit www.hydrogenonecapitalgrowthplc.com or contact:

HydrogenOne Capital LLP - Investment Adviser	Tel: [phone]
JJ Traynor Richard Hulf
Barclays Bank PLC - Corporate Broker Dion Di Miceli Stuart Muress	Tel: [phone] [e-mail]
Buchanan Communications - Financial PR Henry Harrison-Topham Henry Wilson George Beale	Tel: [phone]  Email: [e-mail]

About HydrogenOne:

HydrogenOne is the first London-listed hydrogen fund investing in clean hydrogen for a positive environmental impact. The Company was launched in 2021 with an investment objective to deliver an attractive level of capital growth by investing in a diversified portfolio of hydrogen and complementary hydrogen focused assets. INEOS Energy is a strategic investor in HydrogenOne. The Company is listed on the London Stock Exchange's main market (ticker code: HGEN). The Company is an Article 9 climate impact fund with an ESG policy integrated in investment decisions and asset monitoring.

The Company's Investment Adviser, HydrogenOne Capital LLP (FRN: 954060), is an appointed representative of Thornbridge Investment Management LLP (FRN: 713859) which is authorised and regulated by the Financial Conduct Authority.

IMPORTANT NOTICE

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and/or the plans of one or more of its investee companies and their respective current goals and expectations relating to their respective future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward- looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements.

 

END