Ann: Carbon Revolution Secures US$60m Loan, page-17

Carbon Revolution Secures US$60 Million Loan

Proceeds to Progress Ongoing Investment in Mega-line Automation, Capacity Expansion, Repayment of Existing Debt, and General Working Capital

May 24, 2023 06:30 AM Eastern Daylight Time
GEELONG, Australia--(BUSINESS WIRE)--Carbon Revolution Limited (“CBR”, “Carbon Revolution” or the “Company”, a Tier 1 OEM supplier and a leading global manufacturer of lightweight advanced technology carbon fiber wheels, announced the establishment of a US$60 million debt financing arranged and insured by PIUS Limited LLC, a Gallagher company, and its affiliates (the “Financing”. Net proceeds from the four-year program will be partly used to repay key existing lenders, with the remainder of the capital used to fund further Mega-line automation, capacity expansion, and provide general working capital to support the Company’s forecast growth. The Financing will be secured by the group’s assets, including its intellectual property.

“As the automotive industry shifts rapidly to electrification we are well-positioned to capture this accelerating demand.”

“The funds raised in this financing will progress our ongoing capacity build out, further automation of the facility to reduce our cost structure, and provide us with working capital to support our growth forecasts, without dilution,” said Carbon Revolution CEO and Managing Director, Jake Dingle. “As the automotive industry shifts rapidly to electrification we are well-positioned to capture this accelerating demand.”

The Financing comes at a fixed interest rate of 8.5% per annum with interest-only payments for the first 18 months. The Financing will assist with the delivery of the 11 lightweight wheel programs currently awarded to Carbon Revolution by four leading global automakers including Ford Motor Company, General Motors Company and Ferrari N.V, as well as three additional programs under engineering contracts.

Carbon Revolution is focused on further expanding its footprint in the rapidly growing market for electric vehicles (EVs). The Company’s wheels weigh up to 50% less than comparable aluminum wheels, and can provide up to 5% to 10% increase to EV vehicle range1.

Carbon Revolution’s wheels significantly reduce unsprung mass which greatly improves efficiency, while also helping leading global automakers to comply with the Corporate Average Fuel Economy (CAFE) targetsset by the National Highway Traffic Safety Administration (NHTSA). These benefits have contributed to the award of two OEM EV wheel programs in recent months.

The Company initially penetrated the performance and premium end of the market with wheel programs for vehicles including Ford’s GT and Shelby Mustang GT350R and GT500, Ferrari’s 488 Pista, F8 Tributo, SF90 Stradale, 812 Competizione and 296 GTB, Renault’s Megane RS Trophy R, and GM’s Chevrolet Corvette Z06 and E-Ray. As the global automotive industry shifts to electric power, Carbon Revolution is well positioned to capture OEM demand for weight-saving efficiency technologies.

“In the escalating race to achieve supreme efficiency in automotive vehicles, Carbon Revolution has designed and manufactured some of the most technologically advanced carbon fiber composite wheels, with an extensive IP portfolio spanning multiple jurisdictions,” said PIUS CEO, Joe Agiato. “In addition to our excitement in helping Carbon Revolution leverage its IP to become listed in the United States the PIUS team is enthused about bringing insured technology financing to the Australian market. We look forward to being a part of Carbon Revolution’s future global growth.”

The Financing was secured in connection with the SPAC merger process following the November 2022 signing of a definitive business combination agreement with Twin Ridge Capital Acquisition Corp. (“Twin Ridge” or “TRCA” (NYSE: TRCA) and accompanying scheme implementation deed (“SID” that is expected to result in the Carbon Revolution business becoming publicly listed in the U.S. via a series of transactions, including a scheme of arrangement. Upon closing of the transactions, a newly-formed Irish company (also called Carbon Revolution Limited) (“MergeCo” will acquire both the Company and TRCA and the ordinary shares and warrants of MergeCo are expected to trade on the Nasdaq. Carbon Revolution’s shares will cease to be quoted on the ASX.