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Loop Industries (LOOP) has secured two significant €10 million transactions with Reed Societe Generale Group: a convertible preferred security financing and its first Infinite Loop™ technology license sale. The convertible preferred security includes a 13% PIK dividend rate, 5-year term, and is convertible to Loop common stock at $4.75 per share.
A European partnership, owned 90% by Reed Societe Generale Group and 10% by Loop, will be formed to develop Infinite Loop™ manufacturing facilities in Europe. Loop maintains the right to increase its stake up to 50% in each facility. The proceeds will support the construction of the Infinite Loop™ facility in India with Ester Industries and finance Loop’s operational cash requirements.
Loop Industries (LOOP) ha assicurato due importanti transazioni da 10 milioni di euro con il Reed Societe Generale Group: un finanziamento tramite titolo preferenziale convertibile e la sua prima vendita di licenza della tecnologia Infinite Loop™. Il titolo preferenziale convertibile include un tasso di dividendo PIK del 13%, un termine di 5 anni ed è convertibile in azioni ordinarie di Loop a $4,75 per azione.
Verrà costituita una partnership europea, di cui il 90% sarà di proprietà del Reed Societe Generale Group e il 10% di Loop, per sviluppare impianti di produzione Infinite Loop™ in Europa. Loop mantiene il diritto di aumentare la propria partecipazione fino al 50% in ciascun impianto. I proventi sosterranno la costruzione dell’impianto Infinite Loop™ in India con Ester Industries e finanzieranno le esigenze di liquidità operative di Loop.
Loop Industries (LOOP) ha asegurado dos transacciones significativas de 10 millones de euros con el Reed Societe Generale Group: un financiamiento de un título preferente convertible y su primera venta de licencia de la tecnología Infinite Loop™. El título preferente convertible incluye una tasa de dividendo PIK del 13%, un plazo de 5 años y es convertible en acciones ordinarias de Loop a 4,75 $ por acción.
Se formará una asociación europea, que será propiedad en un 90% del Reed Societe Generale Group y en un 10% de Loop, para desarrollar instalaciones de fabricación Infinite Loop™ en Europa. Loop mantiene el derecho de aumentar su participación hasta el 50% en cada instalación. Los ingresos respaldarán la construcción de la instalación Infinite Loop™ en India con Ester Industries y financiarán las necesidades operativas de efectivo de Loop.
루프 인더스트리즈 (LOOP)는 리드 소시에테 제너럴 그룹과 1천만 유로 규모의 두 가지 중요한 거래를 체결했습니다: 전환 가능한 우선주 자금 조달 및 Infinite Loop™ 기술 라이센스 첫 판매. 전환 가능한 우선주는 13%의 PIK 배당률, 5년 기간을 포함하며, 주당 4.75 달러의 루프 보통주로 전환 가능합니다.
유럽에서 리드 소시에테 제너럴 그룹이 90%, 루프가 10%를 소유하는 파트너십이 Infinite Loop™ 제조 시설을 개발하기 위해 설립될 것입니다. 루프는 각 시설에서 최대 50%의 지분을 늘릴 수 있는 권리를 유지합니다. 수익금은 Ester Industries와 협력하여 인도에 Infinite Loop™ 시설 건설을 지원하고 루프의 운영 자금 요구를 금융 지원합니다.
Loop Industries (LOOP) a sécurisé deux transactions significatives de 10 millions d’euros avec le Reed Societe Generale Group : un financement par titres préférentiels convertibles et la première vente de licence de sa technologie Infinite Loop™. Le titre préférentiel convertible a un taux de dividende PIK de 13%, une durée de 5 ans, et peut être converti en actions ordinaires de Loop au prix de 4,75 $ par action.
Un partenariat européen, détenu à 90 % par le Reed Societe Generale Group et à 10 % par Loop, sera créé pour développer des installations de fabrication Infinite Loop™ en Europe. Loop conserve le droit d’augmenter sa participation jusqu’à 50 % dans chaque installation. Les revenus serviront à soutenir la construction de l’installation Infinite Loop™ en Inde avec Ester Industries et à financer les besoins de liquidités opérationnels de Loop.
Loop Industries (LOOP) hat zwei bedeutende Transaktionen in Höhe von 10 Millionen Euro mit der Reed Societe Generale Group gesichert: eine Finanzierung von wandelbaren Vorzugsaktien und den ersten Lizenzverkauf der Infinite Loop™-Technologie. Die wandelbare Vorzugsaktie umfasst eine PIK-Dividendenrate von 13%, eine Laufzeit von 5 Jahren und ist zu einem Preis von 4,75 $ pro Aktie in Stammaktien von Loop wandelbar.
Eine europäische Partnerschaft, die zu 90 % im Besitz der Reed Societe Generale Group und zu 10 % von Loop ist, wird gegründet, um die Produktionsanlagen für Infinite Loop™ in Europa zu entwickeln. Loop behält sich das Recht vor, seine Beteiligung in jeder Anlage auf bis zu 50 % zu erhöhen. Die Erlöse unterstützen den Bau der Infinite Loop™-Anlage in Indien in Zusammenarbeit mit Ester Industries und finanzieren die operativen Liquiditätsbedürfnisse von Loop.
Positive
- Secured €20 million total through financing and technology license sale
- First technology license sale validates commercial viability
- Option to increase equity stake up to 50% in European facilities
- Strategic partnership with major European financial institution
Negative
- 13% PIK dividend rate represents high cost of capital
- Significant dilution potential at $4.75 conversion price
- Heavy dependence on external funding for operations
Insights
This financing deal marks a significant milestone for Loop Industries, securing €20 million in total through two mechanisms: a convertible preferred security and their first technology license sale. The convertible preferred terms, including a 13% PIK dividend rate and $4.75 conversion price, provide flexibility while minimizing immediate cash obligations. The technology license structure, with Loop retaining 10% ownership and expansion rights up to 50%, creates a scalable revenue model while maintaining strategic control. This dual-transaction approach not only strengthens Loop’s balance sheet but also validates their technology commercially. The backing of Societe Generale adds institutional credibility and potential access to additional capital for future expansion.
The successful commercialization of Loop’s PET recycling technology represents a breakthrough in circular economy solutions. The technology license sale demonstrates market validation after four years of operational proof at their Terrebonne facility. The European partnership structure is particularly strategic, allowing Loop to expand globally without significant capital investment while maintaining technology control and upside potential. This licensing model could accelerate international adoption while generating high-margin revenue streams. The focus on both bottle-grade PET and textile-to-textile polyester fiber positions Loop at the intersection of two massive markets: consumer packaging and sustainable fashion.
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REED SOCIETE GENERALE GROUP INVESTS €10 MILLION IN LOOP VIA A CONVERTIBLE PREFERRED SECURITY AT A $4.75 CONVERSION PRICE.
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LOOP COMPLETES ITS INAUGURAL SALE OF AN INFINITE LOOP™ TECHNOLOGY LICENSE, GENERATING AN UPFRONT PAYMENT OF €10 MILLION.
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FORMATION OF A EUROPEAN PARTNERSHIP TO DEPLOY INFINITE LOOP™ MANUFACTURING TECHNOLOGY.
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PROCEEDS TO SUPPORT CONSTRUCTION OF THE INFINITE LOOP™ FACILITY IN INDIA AND FINANCE LOOP’S OPERATIONAL CASH REQUIREMENTS.
LOOP MANAGEMENT TO HOLD UPDATE CALL AT 8:45 AM ET on December 13, 2024
MONTRÉAL, QC / ACCESSWIRE / December 12, 2024 / Loop Industries, Inc. (Nasdaq:LOOP) (the “Company,” “Loop,” “we,” “us,” or “our”), a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (“PET”) plastic and textile-to-textile (“T2T”) polyester fiber, has secured €10 million through a convertible preferred security financing with Reed Societe Generale Group, a European investment firm majority-owned by the bank Societe Generale. Additionally, as part of the Reed Societe Generale Group transaction, Loop has finalized the sale of its first Infinite Loop™ technology license, generating an initial €10 million payment, with additional milestone-based payments from Reed Societe Generale Group to follow.
The Reed Societe Generale Group transaction marks a pivotal step in Loop’s commercialization strategy, enabling the deployment of its patented recycling technology across Europe and supporting capital investment in cost-effective manufacturing regions, including its joint venture in India with strategic partner Ester Industries Ltd. Proceeds from the financing and licensing deal will fund the Indian project and Loop’s operational cash flow needs.
Key terms of the €10 million convertible preferred security include:
The technology license will be granted to a European partnership owned 90% by Reed Societe Generale Group and 10% by Loop, which is being formed to develop Infinite Loop™ manufacturing facilities in Europe. Loop retains the right to increase its equity stake in the European manufacturing facility, as well as potential future facilities, to a maximum of 50% for each facility. The license is to build one Infinite Loop™ manufacturing facility in Europe. Future facilities under this partnership will require the purchase of additional technology licenses from Loop.
The license sale underscores the commercial readiness of Loop’s technology, validated by four years of successful operations at its Terrebonne facility, which supplies bottle-grade PET resin for consumer packaging and T2T polyester fiber to advance circular fashion for apparel brands. Loop is committed to expanding the reach of its proven solution to the plastic waste global issue by partnering with well-financed, reliable customers through technology licenses and engineering services. This strategy allows Loop to address global demand in regions where it does not plan to build facilities, driving further growth and value creation while focusing Loop’s internal resources and capital on direct equity investments.
With regulatory approval for Societe Generale’s acquisition of a 75% stake in Reed Societe Generale Group finalized, it is positioned to deploy capital into this and other projects. The previous condition precedent to closing relating to government funding is no longer applicable, although Loop expects that such additional financing will be available when the Indian project is approved to begin construction. Funding for both the financing and the initial payment for the technology license is expected within seven business days following the incorporation of the European partnership company.
Julien Touati, CEO of Reed Societe Generale Group, commented: “Reducing dependency on virgin plastics is a global challenge. We are proud to support the rollout of Loop’s technology in Europe by becoming the majority shareholder of this European partnership. This strategic investment allows us to leverage Loop’s unique expertise and strong relationships with world-class brands committed to decarbonizing their supply chains. It fits perfectly with our ambition to actively contribute to the industrialization of Europe’s circular economy, significantly reduce pollution, and foster sustainable growth.”
“The sale of our first technology license is a transformative milestone, proving the scalability and market readiness of our Infinite Loop™ technology,” said Daniel Solomita, CEO and Founder of Loop Industries. “Our financing agreement and partnership with Reed Societe Generale Group propels us into a new phase of growth – expanding into Europe with strategic precision while advancing our flagship Infinite Loop™ project in India. These strategic steps align with our long-term investment vision and underscore our commitment to innovation, scalability, and delivering exceptional value for our shareholders. I look forward to working closely with Julien and his team at Reed Societe Generale Group in leading the circular economy in plastic packaging and circular fashion in Europe.”
Corporate Update Call
Senior Management of Loop will host a corporate update call, followed by a question-and-answer session, which can be accessed via the dial-in numbers below.
Date: Friday, December 13, 2024
Time: 8:45 am Eastern Time
Participant joining details (by Telephone):
United States (Local): +1 404 975 4839
United States (Toll-Free): +1 833 470 1428
Access Code: 625641
OR
Registration Link: https://www.netroadshow.com/events/login?show=2e808989&confId=75536
– Avoid wait time – Bypass speaking with an operator to join the call
– Receive a Calendar Invitation with call access details including your unique PIN
About Loop Industries
Loop Industries is a technology company whose mission is to accelerate the world’s shift toward sustainable PET plastic and polyester fiber and away from our dependence on fossil fuels. Loop Industries owns patented and proprietary technology that depolymerizes no and low-value waste PET plastic and polyester fiber, including plastic bottles and packaging, carpets and textiles of any color, transparency or condition and even ocean plastics that have been degraded by the sun and salt, to its base building blocks (monomers). The monomers are filtered, purified and polymerized to create virgin-quality Loop™ branded PET resin suitable for use in food-grade packaging and polyester fiber, thus enabling our customers to meet their sustainability objectives. Loop™ PET plastic and polyester fiber can be recycled infinitely without degradation of quality, successfully closing the plastic loop. Loop Industries is contributing to the global movement towards a circular economy by reducing plastic waste and recovering waste plastic for a sustainable future.
Common shares of the Company are listed on the NASDAQ Global Market under the symbol “LOOP.”
For more information, please visit www.loopindustries.com. Follow Loop on Twitter: @loopindustries, Instagram: loopindustries, Facebook: Loop Industries and LinkedIn: Loop Industries
Forward-Looking Statements
This news release contains “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “should,” “could,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or “continue,” the negative of such terms or similar words. These forward-looking statements include, without limitation, statements about Loop’s market opportunity, its growth strategies, plans and timelines for completing the €10 million convertible preferred stock financing and technology license sale, plans for use of expected proceeds, ability to improve and expand its capabilities and seek additional financing, and plans for future growth and future operations including expansion in Europe and advancing the joint venture in India. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond Loop’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with among other things: (i) our ability to commercialize our technology and products, (ii) the status of our relationships with our partners, (iii) development and protection of our intellectual property and products, (iv) industry competition, (v) our need for and ability to obtain additional funding relative to our current and future financial commitments, (vi) our ability to continue as a going concern, (vii) engineering, contracting, and building our manufacturing facilities, (viii) our ability to scale, manufacture, and sell our products in order to generate revenues, (ix) our proposed business model and our ability to execute it, (x) our ability to obtain the necessary approvals or satisfy any closing conditions in respect of any of our proposed partnerships, (xi) our joint venture projects and our ability to recover certain expenditures in connection them, (xii) adverse effects on the Company’s business and operations as a result of increased regulatory, media, or financial reporting scrutiny, practices, rumors, or otherwise, (xiii) public health issues, such as disease epidemics, which may lead to reduced access to capital markets, supply chain disruptions, and government-imposed business closures, (xiv) war, regional tensions, and economic or other conflicts that could impact market stability and our business; (xv) the effect of the continuing worldwide macroeconomic uncertainty and its impacts, including inflation, market volatility and fluctuations in foreign currency exchange and interest rates, (xvi) the outcome of any Securities and Exchange Commission (“SEC”) investigations or class action litigation filed against us, (xvii) our ability to hire and/or retain qualified employees and consultants, (xviii) other events or circumstances over which we have little or no control, and (xix) other factors discussed in Loop’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024 filed with the SEC and in Loop’s subsequent filings with the SEC. More detailed information about Loop and the risk factors that may affect the realization of forward-looking statements is set forth in Loop’s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. Loop assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise, unless otherwise required by law.
For More Information:
Investor Relations:
Kevin C. O’Dowd, Investor Relations
Loop Industries, Inc.
+1 617-755-4602
kodowd@loopindustries.com
Media Inquiries:
Andrea Kostiuk, VP Marketing & Communications
Loop Industries, Inc.
+1 (450) 951-8555
akostiuk@loopindustries.com
SOURCE: Loop Industries
View the original press release on accesswire.com
FAQ
What are the key terms of LOOP’s €10 million convertible preferred security with Reed Societe Generale?
The convertible preferred security includes a 13% PIK dividend rate, 5-year term, and is convertible to Loop common stock at $4.75 per share or redeemable in cash.
How much did LOOP receive for its first Infinite Loop technology license sale?
Loop received an initial payment of €10 million for the technology license, with additional milestone-based payments to follow.
What is the ownership structure of LOOP’s new European partnership?
The European partnership is owned 90% by Reed Societe Generale Group and 10% by Loop, with Loop having the right to increase its stake up to 50% in each facility.
How will LOOP use the proceeds from the Reed Societe Generale Group transactions?
The proceeds will fund the Infinite Loop facility construction in India (joint venture with Ester Industries ) and support Loop’s operational cash flow needs.
