Carbon Revolution Limited (“Carbon Revolution” or the “Company”), a Tier 1 OEM supplier and a leading global manufacturer of lightweight advanced technology carbon fiber wheels, announced that Carbon Revolution Public Company Limited, a public limited company incorporated in Ireland (“Carbon Revolution plc” or “MergeCo”) has entered into a Structured Equity Facility of up to US$110 million with two fund vehicles associated with Orion Infrastructure Capital (“OIC”), a leading infrastructure investment firm: OIC Structured Equity Fund I Range, LLC and OIC Structured Equity Fund I GPFA Range, LLC.
In parallel with Carbon Revolution plc securing this strategic investment, the Company is progressing its pending SPAC merger with Twin Ridge Capital Acquisition Corp. (NYSE: TRCA) (“Twin Ridge” or “TRCA”) which is expected to complete during October 2023. The completion of this transaction will result in Carbon Revolution plc becoming the parent of Carbon Revolution and its subsidiaries and listing on an exchange in the United States.
The facility brings the expected capital available in connection with the proposed Business Combination with Twin Ridge to US$230 million including US$60 million asset-backed financing with PIUS Limited LLC, a Gallagher company, that was closed and fully funded in May 2023, as well as a US$60 million Committed Equity Facility.
Last week, the Company announced Board appointments of four U.S.-based senior automotive executives including former General Motors Vice Chairman Bob Lutz. Other appointees include: Burt Jordan, former Vice President of Global Purchasing Operations and Supply Chain Sustainability at Ford Motor Company; Jacqueline A. Dedo, co-founder of Aware Mobility LLC; and Matti Masanovich, Senior Vice President and Chief Financial Officer of Catalent. The appointments become effective upon completion of the proposed combination with appointees serving on the Board of Directors of Carbon Revolution plc.
Under the agreement with OIC, and subject to the satisfaction of certain conditions, Carbon Revolution plc will issue Class A Preferred Shares and a warrant to OIC with respect to up to 19.99% of the MergeCo ordinary shares to be outstanding upon closing of the Business Combination (on a fully diluted basis) in exchange for initial gross proceeds of US$35 million. Further proceeds will be available in tranches upon satisfaction of certain conditions, comprising up to US$35 million and a further US$40 million in aggregate proceeds, the final tranche to be used for the development, construction, or retooling of future manufacturing facilities.
“We are very excited about this capital partnership with OIC. Their collaborative approach and an investment strategy that focuses on sustainable transportation efficiency make OIC a great fit for our next stage of growth. The partnership will provide capital to enable Carbon Revolution to capture the accelerating demand for our carbon fiber wheels, as the global automotive industry shifts rapidly to electrification,” said CEO and Managing Director, Jake Dingle.
“OIC is excited to finalize our capital partnership with Carbon Revolution, which will support the Company’s growth plans and infrastructure expansion,” said Chris Leary, Investment Partner and Head of Infra Equity at OIC. “We believe that Carbon Revolution’s innovative and proven product will be instrumental in supporting EV adoption and overall vehicle efficiency, driven by a multiyear backlog from industry leading OEMs.”
Carbon Revolution is experiencing strong growth in demand for its carbon fiber wheels. As the Company announced on August 31, it has been awarded a further 5 programs since August 2022 -including the first 2 for electric vehicles (EVs) – taking total awarded to 181 programs with six global OEMs including Ford Motor Company, General Motors Company, Renault, Ferrari N.V. and Jaguar Land Rover. The Company’s backlog has more than doubled since October 2022 to US$680 million,2 due primarily to new program awards, with almost 50% of backlog for EVs. The commissioning of the first phase of the Mega-line is progressing well with customer wheels in production and additional capacity expected to be added through to 2025.
Carbon Revolution is focused on further expanding its footprint in the rapidly growing market for EVs. The Company’s wheels weigh up to 50% less than comparable aluminum wheels, and can provide up to 5% to 10% increase to EV vehicle range.3
Carbon Revolution’s wheels significantly reduce unsprung mass, which greatly improves efficiency, while also helping leading global automakers to comply with the Corporate Average Fuel Economy (CAFE) targets set by the National Highway Traffic Safety Administration (NHTSA). These benefits have contributed to the award of 2 OEM EV wheel programs in recent months.
The Company initially penetrated the performance and premium end of the market with wheel programs for vehicles including Ford’s GT and Shelby Mustang GT350R and GT500, Ferrari’s 488 Pista, F8 Tributo, SF90 Stradale, 812 Competizione and 296 GTB, Renault’s Megane RS Trophy R, and GM’s Chevrolet Corvette Z06 and E-Ray. As the global automotive industry shifts to electric power, Carbon Revolution is well positioned to capture OEM demand for weight-saving efficiency technologies.
The financing was secured in connection with the Business Combination following the November 2022 signing of a definitive business combination agreement with Twin Ridge and accompanying scheme implementation deed (“SID”) that is expected to result in the Carbon Revolution business becoming publicly listed in the U.S. via a series of transactions, including a scheme of arrangement. Upon closing of the transactions, MergeCo will acquire both the Company and TRCA and the ordinary shares and warrants of MergeCo are expected to trade on Nasdaq. Carbon Revolution’s shares will cease to be quoted on the ASX.
For more details about the OIC financing, please refer to the Company’s ASX announcement, a copy of which was filed with the SEC.
