Delorean Secures $30 Million Finance Facility for Bioenergy Ventures

2 min read | September 05, 2024 11:03 AM AEST | By Team Kalkine Media

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Delorean Secures $30 Million Finance Facility for Bioenergy Ventures — Image source: shutterstock

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Delorean Corporation Ltd (ASX:DEL) has successfully finalized a significant financial arrangement with Tanarra Restructuring Partners, as announced last month. This three-year corporate finance facility is valued at up to $30 million and is set to play a crucial role in advancing Delorean’s bioenergy projects.

On August 28, Delorean executed a binding Term Sheet with Tanarra for the facility, which will be allocated to the development of the SA1 bioenergy infrastructure project. The latest announcement confirms that Tanarra has made a Financial Investment Decision (FID) regarding the agreement.

The facility is underpinned by two key agreements: the Facility Agreement and the Options Deed. Both agreements have been formalized, with only procedural legal documents remaining to be completed to meet the conditions required for Financial Close. The Financial Close is anticipated to be finalized by mid-September.

Once the Financial Close is achieved, construction on the SA1 project is expected to commence in the final quarter of 2024. Located in Salisbury, South Australia, the SA1 project aims to be Australia’s inaugural initiative to convert organic waste into green gas for mains distribution.

In its initial phase, SA1 is projected to process up to 70,000 tonnes per annum of commercial and industrial waste from the Adelaide metropolitan area. This will result in the production of 2,000 Terajoules per annum of renewable gas (biomethane), which will be integrated into the gas network through a multi-year off-take agreement with Origin.

The finance facility comprises two tranches:

Facility A: $5 million dedicated to working capital, including the refinancing and redemption of Delorean’s existing convertible notes. This tranche will address the Company’s liabilities and discharge associated securities.

Facility B: $25 million allocated for capital contributions to the SA1 project, facilitating the project's construction. This tranche will also be available for redeployment into Delorean’s follow-on development projects within the three-year term, contingent upon refinancing the SA1 project post-construction, expected around December 2025.

This financing arrangement positions Delorean to advance its bioenergy initiatives and contributes to its broader strategy in the renewable energy sector.

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