FREYR Battery Inc. (NYSE:FREY) shares are trading higher on Wednesday. The company agreed to acquire U.S. solar manufacturing assets from Trina Solar Co Ltd. for a total consideration of $340 million.
The consideration to Trina Solar includes $100 million in cash, a $50 million loan repayment, a $150 million loan note, 9.9% of FREYR common stock, and a convertible note for an additional 11.5% equity stake, subject to conditions.
FREYR has also secured $100 million from Encompass Capital in preferred stock and raised $14.8 million through a private stock placement.
As part of the agreement, FREYR will acquire Trina Solar's 5 GW, 1.35 million square foot solar module manufacturing facility in Wilmer, Texas, which began production on Nov. 1, 2024.
The facility is set to reach full production capacity in 2025, with 30% of anticipated volumes already supported by firm offtake contracts with U.S. customers.
The transaction, expected to close by year-end 2024, is subject to customary conditions.
Following the transaction's close, FREYR will launch a multi-phase strategy to establish a vertically integrated U.S. solar manufacturing presence.
The next step involves building a 5 GW solar cell facility, with site selection underway and construction targeted to begin in the second half of 2025. Initial production is expected in the second half of 2026.
Management: The company's Board Chairman Daniel Barcelo immediately assumed the CEO role, with Evan Calio continuing as CFO.
Outlook: FREYR projects 2025 EBITDA between $75 million and $125 million, with expectations to reach a full-year run-rate EBITDA of $175 million to $225 million by year-end.
European Assets Value Optimization: FREYR launched a value optimization and monetization initiative in Europe, aligning with its focus on U.S. solar vertical integration.
The company has also terminated its SemiSolid technology license with 24M Technologies, leaving no remaining financial obligations or equity interest in 24M.
In a separate report, the company reported a third-quarter 2024 EPS loss of $(0.20), missing the consensus of $(0.18).
As of Sept. 30, 2024, FREYR had cash, cash equivalents and restricted cash of $184.1 million.
FREY Price Action: FREYR shares are up 42.03% at $1.38 at publication Wednesday.
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Photo: Courtesy of Freyr Battery
