10 Aug, 2023

Freyr Battery plans move to US, seeks $1B equity infusion for factory in Georgia

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Freyr Battery has begun construction of its "Giga Arctic" factory in Norway, which is the template for its planned "Giga America" plant in Georgia.
Source: Freyr Battery

European lithium-ion battery upstart Freyr Battery is deepening its transatlantic ties, lured to the US by lucrative incentives that have unleashed a clean energy manufacturing renaissance.

Headquartered in Luxembourg and having begun the ramping process at a demonstration plant in Norway, Freyr intends to "redomicile" its corporate headquarters to the US by the end of 2023, the company announced Aug. 10. Freyr is currently raising equity and debt to finance its planned multibillion-dollar "Giga America" factory in Georgia, which is scheduled to break ground later this year.

"We are a company with a Norwegian DNA ... but a dual giga-factory developer on both sides of the Atlantic," Freyr CEO Tom Einar Jensen said in an interview following the New York Stock Exchange-listed company's second-quarter earnings call. "This was an easy call for us."

Inflation Reduction Act incentives for US-made batteries have supercharged the sector's ambitious growth plans. At least $63 billion in public- and private-sector investment commitments for domestic cells, modules and materials supply have been unveiled since the law was signed one year ago, and Freyr could soon add to that total.

The company is in advanced discussions with investors on a $1 billion equity financing deal to support the first phase of its planned 38-GWh manufacturing complex in Coweta County, Ga., which it expects to close in the fourth quarter, Freyr said in its second-quarter update.

"We are in investor presentation mode, due diligence mode, the deep Q&A, initial contracting and structuring," the CEO told S&P Global Commodity Insights.

In addition, Freyr said is seeking a US Energy Department loan guarantee for the next phase of the Georgia complex. It has not disclosed details of the proposed debt financing but said the net present value of the two phases of the US plant are about $8 billion.

Freyr's technological foundation already resides in the US, through a licensing partnership with Massachusetts-based 24M Technologies Inc. Relying on 24M's semi-solid cell design, Freyr is initially focused on producing lithium-iron-phosphate batteries for energy storage applications. It has secured supply agreements with companies incentivized by the IRA to purchase US-made batteries, including Powin LLC and Honeywell International Inc.

"All of this speaks in favor of us redomiciling to the US and our ambition is to have that closed out before Christmas," Jensen said.

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New CEO

The next phase of Freyr's growth will be led by Birger Steen, a former executive at Microsoft Corp. and current board chair of Nordic Semiconductor ASA and Pagero AB, who will replace Jensen as CEO on Aug. 21, the company also announced Aug. 10. Steen was appointed to Freyr's board of directors, effective Aug. 9.

"He knows what it is to take ... a globally competitive environment and really differentiate and be the lead in a particular product segment," said Jensen, a company co-founder who will become executive chair of Freyr's board. Freyr's current executive chair, company founder Torstein Dale Sjøtveit, retired, effective Aug. 9.

The pre-revenue company reported a second-quarter net loss attributable to ordinary shareholders of $25.3 million, or a loss of 18 cents per diluted share, compared to net income of $4.7 million, or 4 cents per diluted share, in the second quarter of 2022. That beat the S&P Capital IQ consensus of a GAAP net loss of 22 cents a share.

Freyr attributed the loss to corporate overhead, business development activities and projects, and research and development spending. As of June 30, the company had cash, cash equivalents and restricted cash totaling $383.8 million.

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