European Green Transition (EGT), a company chaired by serial entrepreneur Cathal Friel focused on assets and businesses needed for the green energy transition, has confirmed that it is planning to pursue an initial public offering (IPO) in London.
It would mark the fifth IPO that Mr Friel’s Raglan Capital corporate finance business has orchestrated in the space of a dozen years.
EGT’s main shareholders are Mr Friel, who currently owns 43.8 per cent of the company, and fellow director Michael Nolan, a 11.6 per cent stakeholder co-founder of Fastnet Oil & Gas, which Raglan brought to AIM, the London Stock Exchange’s market for small companies, in 2012.
Chief executive Aidan Lavelle owns 6.9 per cent of the company. All stakes are based on equity in EGT before the raising funds in the IPO. The company is expected to have pre-IPO value of close to £10 million (€11.7 million). The aim is to have follow-on stock placings as the company develops.
The company is expected to started trading on London’s junior AIM market after Easter.
The seed portfolio includes three exploration projects – two in Sweden and one in Germany – for critical metals such as lithium, used for electric vehicle batteries, and rare-earth metals such as dysprosium and terbium, used in the manufacture of wind turbines.
“We are very excited by the scale of the opportunities created by the green economy transition in Europe. We are applying our M&A [mergers and acquisitions] focused approach of targeting distressed and undervalued assets towards prospects in the green economy,” said Mr Friel.
The principal asset is the so-called Olserum REE (rare-earth elements) project in southern Sweden, which EGT aims to progress towards obtaining a 25-year exploitation permit. EGT does not intend to mine itself, but bring in a partner and benefit from royalties.
A European Union law aimed at boosting supply from within the bloc of minerals crucial for its green and digital transitions – and end its reliance on Chinese supply – is on track to enter force this year, subject to the European Council approving a final text agreed by the European Parliament in December.
The EU’s demand for base metals, battery materials, rare earths and more is set to increase exponentially as it moves away from fossil fuels and turns to clean energy systems which necessitate more minerals.
A number of the other companies that Raglan oversaw the flotation on the stock market over the past 12 years have created value through acquisitions of distressed assets.
Fastnet Oil & Gas spun off its oil and gas assets in 2015, following a slump in oil prices. However, Mr Friel subsequently managed a merger in 2016 of what was then a listed cash shell company with Amryt Pharma, which was looking to buy and develop a pipeline of drug candidates focused on treating rare and orphan diseases. The deal was essentially an IPO as it involved a €12.6 million stock offering.
Amryt was acquired for about $1.48 billion (€1.37 billion) last year by Chiesi Farmaceutici, an Italian pharmaceutical company.
Mr Friel orchestrated the IPO of Open Orphan, a pharma services company, in 2019 through the reverse takeover of Dublin-listed Venn Life Sciences. The company went on later that year to buy UK clinical trials business Hvivo, which was struggling at the time. The since-renamed Hvivo group had a market value of €206.8 million as of Friday.
Hvivo spun out its Poolbeg Pharma unit, which is focused on developing treatments for infectious diseases, in 2021 through an IPO in London of the division that raised £25 million (€29.2 million). Poolbeg’s market capitalisation stands at £48.7 million (€48.5 million).
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