What's certain is that the market does not like uncertainity!!!
What VUL has done with the Stellantis OTA and to a lesser extent with the Renault OTA is provide cash flow certainty that is necessary to cover the debt covenants.
At the midpoint we have 12,350 at $US$21K/t to Stellantis & 6,300 at $16K/t to Renault.
Annual Revenue from these 2 OTAs = $259M + $101M = $360M
Expected EBITDA at 84% margin (DFS) = US$302M
There is going to be a lot of debt ... but depending on the structure between the SPVs and also the balance sheets of the partner(s), just these 2 OTAs could easily (arguably) support US$750M of debt (at a 2.5X mulitple)
I firmly believe that id VUL did not have a portion of OTA as fixed price getting project finance would not be straightforward. The biggest remaining risk IMO is proving VULSORB at scale. We are talking a project of 30+ yrs .... get through the first operational phase (for me thats matches to the 5yrs of fixed price Stellantis OTA) and then VUL could be a chemical giant in the making (along the lines of SQM in brines). That said, its speculative now and I will always remain highly diversified in Lithium projects.
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