I posted up a link last week showing that Velocys had just completed the groundwork for a capital raise and that a new strategic investor was involved. In all the hype and fuss I came to the same conclusion as many that this was most likely Roman Abramovitch [and it might be?]
But what if it's Linc.
This is total speculation so if you're over reading hype and rumour stop here, otherwise this is my thinking.
Peter Bond gave a phone interview to the Washington Post on Tuesday and it’s my understanding he was probably in the USA at the time. Why else would he give a seemingly random interview to the Washington Post when every Australian media outlet is seeking information about your companies crazy price rise, unless the information was relevant to the US markets or that’s where you are? Velocys announced the capital raise on the same day, so if Linc is involved I would propose that PB was in Ohio to sign some papers. Just a guess.
Velocys has spent the past month firming up its supply chain and contesting a court case that is now finalised with patents unchanged. They have signed a number of agreements to aid the commercial roll out of their FT technology in 2013 [Ventech and Mourik], and the timing just happens to fit with the completion of six months testing of the new FT and catalyst at Chinchilla. In my opinion the lack of these established relationships and threat to the OCG patent portfolio have been stumbling blocks for GCL. Now that those issues have been sorted I believe it clears the way for Bond to negotiate some sort of buy in agreement that gives rights to use of the technology with UCG exclusively to LNC. If Linc are going to use Velocys technology they’re going to have to either buy into the company or pay a licence fee, I think there’s a reasonable argument that this is it.
The capital raise goes to a vote on the 3rd of January for implementation of the new shares to trading on the 4th. Before then the company needs to release an RNS outlining the order of business of the general meeting where shareholders will get to vote on this placement. I imagine the strategic investor will be named, so I will be keeping a close eye on the Velocys website this week for that information.
Should any of this be close to the truth and Roman Abramovitch buys into Linc he would also gain the benefits of the LNC/OCG relationship which would negate the need for him to buy into OCG directly.
It’s been my vocal opinion for a long while that Velocys has been a major holdup for the GCL deal. If there’s any chance that we are to be the strategic investor involved with this cap raise, I think that will say good things for a completion with GCL.
The last point I would make is that in the past the confidential demonstration facility mentioned on the Velocys website has always been a ‘clients’, whereas in the RNS released to the AIM this week there is mention of a"...demonstration of a commercial scale reactor at a ‘customer’ site in the Asia Pacific region". A small but perhaps important change in wording.
MrMc.
LNC Price at posting:
$1.06 Sentiment: None Disclosure: Held
