- Hydrogen producer Hazer (HZR) is set to bag a potential $4 million investment from London-based fund manager AP Ventures (APV)
- Under the non-binding term sheet, APV will be given four million unlisted notes and 2.25 million options from Hazer in return for its investment
- Both the notes and the options last for five years and can't be exercised within the first 12 months of the deal
- Hazer's hydrogen production process is designed to produce the element with 50 per cent lower carbon emissions than conventional methods
- APV invests in hydrogen production, storage, and transportation — making Hazer an easy investment target
- Shareholders seem impressed with today's news, with Hazer shares up over 10 per cent this afternoon and worth 70 cents each
Hydrogen producer Hazer (HZR) is set to bag a potential $4 million investment from London-based fund manager AP Ventures (APV).
APV's focus is on addressing sustainable energy and resource scarcity issues by investing in hydrogen companies. The venture fund invests in hydrogen production, storage, and transportation — making Hazer an easy investment target.
The HAZER process
Hazer's namesake hydrogen production process is designed to make the clean energy element even cleaner.
Essentially, while hydrogen can play an important role in large-scale low-carbon energy production, producing the element can, ironically, be damaging to the environment.
Hazer's process produces economically competitive hydrogen with 50 per cent lower carbon emissions compared to conventional fossil-fuel-based production methods.
The HAZER Process can also be used to make high-quality, low-cost synthetic graphite.
AP Ventures terms
Under the proposed deal between the two companies, APV will invest $4 million in Hazer in return for four million unlisted notes and 2.25 million unlisted HZR options.
The notes, while unsecured, have a five-year term and will be converted to ordinary HZR shares at their five-day volume-weighted average prices at the time of conversion. The notes have a 20-cent floor price. Importantly, a maximum of $1.33 million worth of notes can be converted in one go according to the term sheet, and no notes can be converted in the first 12 months from issue.
Similarly, the options last five-years and can't be exercised within the first 12 months from issue. They give APV the right to buy 2.25 million ordinary HZR shares for a nominal consideration.
Hazer Chair Tim Goldsmith said the company is delighted to have signed the non-binding term sheet with APV and looks forward to finalising the investment deal.
"The board and I believe that APV’s deep global hydrogen experience will be extremely valuable as we commercialise the Hazer process and progress through scale-up and first commercial operations over the next few years," Tim said.
"There is a significant global focus on the transition to cleaner energy and cleaner industry — a focus that has accelerated as major economies look to transition from the impact of COVID-19," he said.
Tim added that the company expects hydrogen to play a major role in this global shift to clean energy.
Similarly, APV Managing Partner Andrew Hinkly said the firm is excited to welcome Hazer to its portfolio.
"The production of low-carbon and low-cost hydrogen is the key to unlocking the global hydrogen economy and we believe Hazer’s technology offers a unique and elegant solution," Andrew said.
Investors seem impressed with the APV support, with Hazer shares trading 10.16 per cent higher this afternoon and worth 70 cents each at 2:16 pm AEDT.