AIMCo makes debt investment in Tidewater Renewables
The Prince George refinery in British Columbia. Source: Tidewater Midstream & Infrastructure Ltd
Canadian green fuels producer Tidewater Renewables Ltd (TSE:LCFS) has closed a CAD-150-million (USD 109m/EUR 111m) investment by institutional investment manager Alberta Investment Management Corporation (AIMCo), the companies said on Monday.
The investment represents a five-year senior secured second lien credit facility that was drawn down by way of a single advance at closing. The net proceeds reflect a 5% original issue discount.
Tidewater Renewables, which is focused on the production of fuels such as renewable diesel, renewable hydrogen and renewable natural gas, will use the funding to repay credits, for working capital, general corporate purposes and for growth projects.
The AIMCo facility will have an initial interest of 6.50% per year, with a potential maximum cash coupon of about 8.50% by year five. Tidewater Renewables also issued 3.375 million warrants to AIMCo, each entitling AIMCo to purchase one common share of Tidewater Renewables at CAD 14.84 per share for a term of five years. This represents a 50% premium to its 10-day average trading price before completion of the deal.
Tidewater Renewables executive chairman and chief executive Joel MacLeod said the company’s initial public offering (IPO) in August 2021 capitalised the business for its near-term growth programme. It has now commissioned its two co-processing projects and is progressing its flagship renewable diesel and renewable hydrogen complex.
"AIMCo's investment in Tidewater Renewables represents a rare opportunity for our clients to invest in renewable fuels, supporting the energy transition through a first-mover advantage in renewable fuels projects while ensuring long-term return objectives are met," said Ben Hawkins, head, Infrastructure, Renewables and Sustainable Investing.