Business
Loop Announces Agreement To Sell Bécancour Site for CDN $18.5 Million (US $13.9 Million) and Cost Reduction Measures To Ensure Ongoing Liquidity
Combination of land sale and cost reduction measures provides close to 3 years of liquidity to finance operating activities prior to startup of large-scale
About this update from Loop Industries, Inc.
[{"type":"text","content":"Combination of land sale and cost reduction measures provides close to 3 years of liquidity to finance operating activities prior to startup of large-scale commercial manufacturing facilitiesFocus of commercialization strategy on prioritizing joint venture projects with SK geo centric \"SKGC\"Loop management to hold update call: 11:00am ET, on Friday December 23rd, 2022MONTREAL, QC / ACCESSWIRE / December 22, 2022 / Loop Industries, Inc. (NASDAQ:LOOP) (the \"Company\" or \"Loop\"), a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (\"PET\") plastic and polyester fiber, today made the following announcements:The Company has entered into an agreement to sell all of its remaining property in Bécancour, Quebec for CDN $18.5 million (US $13.9 million). The sale transaction is expected to close on February 24, 2023, subject to final due diligence and fulfillment of certain customary closing conditions.The Company has significantly curtailed operations at its Terrebonne, Quebec production facility. This facility was constructed primarily to demonstrate that Loop's breakthrough depolymerization technology was scalable and to produce commercial quantities of virgin quality PET resin and polyester fiber for global brands. The technology is now proven at scale. The Company will continue to honour its existing sales contracts, while reducing production capacity.Based on the combination of the proceeds of the land sale and the operating cost reduction initiatives at Terrebonne, the Company projects to have cash on hand of approximately US $33.1 million at the end of the current fiscal year ending February 28, 2023 and an annual cash burn of approximately US $12.5 million, therefore providing close to three years of liquidity, without incurring further equity dilution to finance ongoing operating activities.The Company will for now focus its commercialization strategy on its planned projects with SKGC in Asia and Europe. These joint venture projects have a lower requirement for Loop equity investment and higher return on capital, and leverage SKGC's engineering and operational infrastructure. In addition, the joint venture projects will provide Loop with an annual technology licensing fee.SKGC is committed to commercializing Loop's technology as the ...