Vulcan (ASX:VUL) shares soar on A$76M investment from Stellantis

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Vulcan (ASX:VUL) shares soar on A$76M investment from Stellantis

 Vulcan (ASX:VUL) shares soar on A$76M investment from Stellantis
Image source: © Malpetr | Megapixl.com

 Highlights

  • Vulcan Energy Resources (ASX:VUL) has received AU$76 million as equity investment from automaker Stellantis N.V.
  • Vulcan and Stellantis have also extended their binding lithium hydroxide offtake agreement by five years, to 2035.
  • VUL share price has surged more than 21% after the announcement.

Creating history, Vulcan Energy Resources Limited (ASX:VUL) has bagged world’s first upstream investment in a listed lithium company from an automaker. Vulcan has accepted an AU$76 million worth of equity investment from Stellantis N.V.

With this, Stellantis has become largest off taker and a substantial shareholder in Vulcan now.  For Stellantis, the deal represents a highly strategic investment for a resilient value chain, mainly for its European electric vehicle battery production business.

Vulcan energy shares soar on ASX

Post today’s ASX announcement, Vulcan Energy’s share price has soared over 21%. VUL shares traded at AU$6.070 a share at 10:45 AM AEST. While yesterday, shares of most of the lithium companies were sliding down, VUL shares had also plunged to its one-month low level. However today, VUL share price has leaped back up. At the time of writing, Vulcan Energy held a market cap of AU$658.22 million.

 Key highlights of Vulcan Energy’s latest equity inflow

  • Vulcan Energy is getting an equity investment of AU$76M from globally well-known automaker Stellantis N.V.
  • The investment is for fully paid ordinary shares of Vulcan Energy being offered at the 30-day Volume Weighted Average Price (VWAP) of AU$6.622 a share.
  • The investment from Stellantis therefore represents 11.450 million Vulcan Energy shares.
  • With this investment Stellantis will be getting a 8% stake in Vulcan Energy, making it the second largest shareholder in Vulcan Energy.
  • The investment proceeds, as per the ASX release, will be used at Vulcan Energy’s planned production expansion drilling in its producing Upper Rhine Valley Brine Field (URVBF).
  • Vulcan and Stellantis have extended their binding lithium hydroxide offtake agreement by five years, till 2035.

More about Stellantis and Vulcan’s Upper Rhine Brine FIeld

Vulcan produces geothermal energy from its URVBF. As a part of its Zero Carbon Lithium™ Project, Vulcan is also planning to produce lithium hydroxide with a net zero carbon footprint. Aligned with Vulcan’s mission to decarbonise and electrify transportation, Stellantis, one of the world’s leading automakers has made the investment. Notably, the investment by Stellantis is the largest electrification and decarbonisation plan by any automaker globally.  

Stellantis is interestingly a market leader of the low emission vehicle category (LEV) of passenger cars and Light Commercial Vehicles (LCV). Stellantis has boosted its planned battery capacity with five battery manufacturing plants in Europe and North America, together with additional supply contracts. It is also a portfolio holder of 14 vehicle brands and two mobility companies.

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