Yes ... a billion is nothing. But TLG the company itself, with its present balance sheet, wont get $5B, $1B or even $500M. Different kind of cheese.
That Northvolt (Swedish Lithium-ion battery maker) of
$1.6B of debt financing (Jul 2020) though
WAS AFTER VW (which bought 20% of the equity in Northvolt), BMW and others had agreed to fund (VIA
AN EQUITY RAISING of $1B) Northvolt’s plan to build Europe’s largest lithium-ion battery plant. On top of that, Northvolt had already presold ~$30B of product over next 10 years to 2030.
That debt facility was a no brainer given the balance sheet of Northvolt. The bank loan was a syndicated loan with a group of banks, pension funds AND Public Institutions (specifically Nordic Investment Bank - an intergovernmental treaty between Denmark, Finland, Iceland, Norway and Sweden (1975) and in 2005 added Estonia, Latvia and Lithuania as members of the Bank - and whose
sole mission is to finance projects that improve the productivity and benefit the environment of the Nordic and Baltic countries).
I'm interested in looking after the equity shareholder ... which wont be easy given the balance sheet of TLG ... which is
Total Assets = $8,814,554
Total Liabilities = $1,572,173
Total Equity = $7,242,381No Financial Institution (especially a bank) lends $1B on the above.
LKAB is state-owned ... makes a great deal of sense for them to borrow via NIB ... lending their crediting to TLG. Got no idea as to what is a reasonable amount ... minimum 10%??? or ~$100M. This is an ideal "off balance sheet" debt facility for us at the project level.
Mitsui has a history of trading in "graphite" ... a natural offtake partner perhaps
https://investorintel.com/markets/technology-metals/technology-metals-intel/grafoid-strikes-strategic-partnership-japan/
whether anything actually became of that I haven't researched. Wasn't Mitsui also involved with Syrah years ago?? speaking of Syrah ... take a look at their Equity Capital Raising and convertible note debt (with Australian Super).
What about Volvo - they have a venture capital arm - specifically for this stuff.
It won't be easy but if the project is as good as MT says then getting the right structure to protect equity investors (after all MT has a bunch of it) is the key to the deal ... not the amount of debt. This is heart of it.
(20min delay)