Street Talk

In one of todays national financial newspapers

Battery play Li-S Energy powers up IPO pitch, seeks $500m valuation

Jul 1, 2021 – 9.32pm

Lithium-sulphur battery play Li-S Energy Ltd is finalising a $500 million-odd pitch to join the ASX-boards.Street Talk understands Li-S Energy, which reckons it has unlocked a holy grail of the battery market, is putting the finishing touches on a prospectus for a $40 million to $50 million initial public offering in a deal that would value it at about $500 million. Li-S Energy management, headed by CEO Lee Finniear, is expected to start pitching potential investors in mid-July, with the listing slated for August. There’s a race to find the battery combination to take over from Lithium-ion. Li-S Energy reckons it has a strong contender. BloombergSources said the IPO was more about finding the spread required to hit the ASX boards, rather than raise a big bucket of capital for the business or allow existing investors to get out.Li-S Energy is expected to tell investors it has the means to harness the power of lithium-sulphur, which is a potentially much stronger and longer-lasting combination for a battery than lithium-ion, but has been too volatile for battery and electronic product makers.Li-S Energy’s solution lies with boron nitride nanotubes (BNNTs), which can work inside lithium-sulphur batteries to keep them stable and make them usable. The problem is BNNTs have been too rare and expensive to allow mass production of lithium-sulphur batteries.So the company, part-owned by ASX-listed PPK Group and Deakin University, has set up a BNNT factory in Geelong for large scale production, to make cheaper and more available BNNTs. The factory recently hit 1kg BNNT production in a five-day period, which was pitched as a “major breakthrough”.Shares in PPK, which has a 48 per cent stake, have already skyrocketed on the news. A bunch of funds also invested in Li-S Energy in a recent $20 million pre-IPO deal which valued the company at $300 million. They’re licking their lips ahead of the listing.While Street Talk’s no battery expert, the technology is sure to spark debate among buy and sellside analysts that watch the batteries sector closely. There seems to be furious agreement that lithium-sulphur is a powerful combination - there has been for years - although not everyone is sure whether BNNTs are the long-term solution.