Velocys, the sustainable jet fuel technology developer, witnessed a sharp decline in its shares on Tuesday following an update on its funding plans.
The AIM-listed company had initially disclosed on 21 September that it had extended the longstop date for its convertible loan notes (CLN) transaction, which had been originally outlined on 18 May, to 31 October.
The extension was contingent upon specific conditions, including a commitment from Carbon Direct Capital to invest $15 million through convertible loan notes, provided there was a minimum aggregate raise of $40 million.
However, on Tuesday, Velocys confirmed that these conditions had not been met.
The company’s board explained that despite months of ongoing active funding discussions with strategic investors who had been conducting due diligence, it had concluded that any resulting investment was unlikely to match the terms of the previously announced convertible loan note.
Consequently, there would be no further extension to the longstop date, and there were presently no binding funding arrangements in place.
The Velocys board stated, “As detailed in its recent interim results, Velocys still anticipates that funding will be required before the end of this calendar year and therefore the board is prudently exploring near-term funding options as discussions with the strategic investors continue.”
The company promised to provide further updates in due course.
As of 0822 BST, Velocys’ shares had plunged by 58.31%, trading at 0.42p. The company faces an uncertain future as it grapples with its funding challenges, leaving investors and industry observers closely watching its next moves.