ITM Power (ITM), a hydrogen electrolyzer firm, announced a £250 million placement to support a substantial growth program.
ITM announced the placement on Friday morning at 400p, a 14% reduction to its previous closing price, sending its shares down 10% to 429p.
The company’s technique produces hydrogen gas from water and power, which may subsequently be stored as energy or utilized in industrial operations. After a £172 million fundraising that completed in November 2020, this is the company’s second large placement in the last year.
Green hydrogen is promoted as a way to decarbonize high-polluting industries like steel and cement production, despite the reality that vast quantities of new renewable energy generation are required to achieve emissions reductions.
At a meeting on November 3, shareholders will be asked to approve the new dilutionary raise, while current significant investor and joint venture partner Linde (US:LIN) has agreed to buy £20 million in additional shares. On Thursday, ITM also released a trading update for the first quarter, which ended on July 31. For the quarter, sales were £1.2 million and cash burn was £5.3 million.
ITM’s plans for the £250 million include automating operations at its existing facility and expanding capacity to 5 gigawatts (GW), which refers to yearly electrolyser production in units of electrolysers. Its Sheffield plant currently has a capacity of 1GW.
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