Lands of the Bécancour industrial park | Paid sales for Loop, which counts its money

As it tightens its belt to market its process which aims to recycle single-use plastic, Loop Industries is building up a “three-year reserve” by selling, five times the price paid, land purchased in Bécancour a while ago. less than two years.

“It wasn’t what I had in mind, but there was a lot of interest last summer because of the industry [québécoise] batteries,” says Daniel Solomita, founder and CEO of the young Quebec company. “The value of the land has gone up 500%. It was a fairly easy transaction to make. This gives us three years of capital to wait for the markets to recover. »

By agreeing to leave the Bécancour industrial park, the privileged place for the development of the battery sector, the company founded in 2014 will obtain 30.5 million.

The final months of 2022 have been busy for the company. It concluded two land transactions, settled a class action in the United States for US$3.1 million, revised its ambitions with regard to its commercial plant project in Quebec and reduced the pace of its pilot plant in Terrebonne. This information is contained in its third quarter report recently filed with US stock exchange authorities.

From now on, the financial resources will be devoted to its partnership with the South Korean giant SK Global Chemical (SKGC), which owns 10% of Loop. Work on the first plant emanating from the alliance between the two companies, which is to see the light of day in Ulsan, South Korea, should begin around September, according to Mr. Solomita.

“SK brings 80% of the capital for the factories,” he says. The money that Loop has to put into these projects is less. What we want is to be able to build commercial factories without raising capital when the markets are weaker. »

As of November 30, the company, which still does not generate net profits, had cash of 21.5 million US. The sale of his land in Bécancour therefore gives him a little financial flexibility.

Later in Quebec

Loop had got its hands on a 1.8 million square meter (20 million square foot) piece of land in Bécancour for 5.9 million in May 2021. The location belonged to IFFCO, a cooperative which had abandoned a factory project fertilizer (urea). About half the place had been sold for 12 million last fall. The transaction for the other half should be finalized on February 24. It is not yet known who the buyer is.

The transaction raises doubts about the possibility of seeing Loop embark on the construction of a commercial plant in Quebec. His big boss is still thinking about it, but we will have to wait a few years before talking about it again.

“We have to wait until the economic climate is better and the federal government is a little more serious with its desire to eliminate plastic pollution by 2030,” says Solomita.

In addition, in order to reduce its expenses, Loop has slowed down the pace of activities at its pilot plant in Terrebonne; it operates at 30% capacity. There are now around 60 employees on the site, ie around 30 less than before. The decision was made because the partnership with SKGC is going well, says the president of Loop.

Still haunted by her past

Founded in 2014, Loop says it has designed a chemical process that allows it to recycle PET plastic waste – such as plastic bottles and packaging. This technology would create by-products so pure that they could be reused in food packaging. The commercialization stage has not yet been reached.

Loop had found itself in the spotlight in 2020 following a report from a short seller.

The publication of the report had shaken Loop on the stock market. On the NASDAQ, the stock had lost more than 35% of its value following the release of the report, in October 2020. This had led to the filing of class action claims in Canada and the United States. To turn the page on a dispute south of the border, the company agreed to settle out of court for a sum of 3.1 million US. The settlement does not constitute an “admission” of misconduct, the quarterly report points out.

“Defending for years in the United States would have cost a lot more,” says Solomita. It was an easy decision to make. »

In Quebec, the Superior Court refused to hear a class action lawsuit filed against Loop.

With Andre Dubuc, The Press