AMTE Power: Announcement of intention to float on AIM
AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announces its intention to seek admission to trading on AIM of the entire issued and to be issued ordinary share capital of the Company. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million (before expenses) by way of a placing of new ordinary shares in the capital of the Company (“Ordinary Shares”).
AMTE Power was co-founded in 2013 by Kevin Brundish, together with several others, including former colleagues from QinetiQ, with the objective of developing a portfolio of highly differentiated, lithiumion and lithium-ion derivative battery cells to meet the needs of specialist customers. Such customers, which include manufacturers of high-performance vehicles and specialist equipment, are not, in the Directors’ experience, the primary focus of the international battery cell manufacturers, thereby creating a significant and scalable opportunity for the Company.
Key attributes of the AMTE Power business are as follows:
• The Company’s highly experienced management team has implemented a distinctive strategy of not only accessing intellectual property, but also developing products based thereon to address its specialist customers’ requirements, with the intention in due course of utilising its facilities to manufacture cells on a commercial scale;
• The Company has accessed a strong intellectual property portfolio from technology companies, QinetiQ and Faradion Limited, which enables it to develop new battery cells meeting the needs of its customers by building on the substantial early investment by these companies;
• It has been working in collaboration with a significant number of industrial businesses, including nine UK-based leading automotive manufacturers and component suppliers;
• Since being established, it has secured an aggregate of approximately £9.1 million of equity finance, been directly awarded approximately £5.8 million of public sector grants and has generated commercial income to date of approximately £2.5 million;
• It is the Directors’ understanding based on their market knowledge that the Company is well placed as one of only five UK commercial battery cell manufacturers with its purpose-built cell manufacturing facility at Thurso, Scotland, which has the second largest cell manufacturing capacity in the UK;
• In addition to its Thurso facility, the Company has entered into a framework agreement governing access to the UK Battery Industrialisation Centre (the “UK BIC”) cell manufacturing facility and, in 2022, intends to commit to building a new UK manufacturing facility with a capacity of approximately 2GWh per annum; and
• The Company has three highly differentiated battery cells in development, with one expected to enter production in each of the next three years, and a pipeline of technologies for future development.
Kevin Brundish, CEO of AMTE Power, said:
“Early on we chose to focus on the requirements of specialist customers whose power, performance and endurance needs are, we believe, outside the scope of the international manufacturers and also to not simply be a developer but have the manufacturing capability to deliver our products. The combination of which, we believe, differentiates AMTE and places us in a highly advantageous position.
“To give an example, our Ultra High Power battery cell which is designed for a high-performance sports car, needs to generate more power, than an average automotive battery, to deliver the required acceleration. To help develop and better understand the requirements for our products we have been working collaboratively with nine automotive companies including Jaguar Land Rover, Cosworth and Williams.
“We have also been working with the UK Government on our plans for building a British Gigafactory which is part of the Company’s medium term outlook. However, today’s announcement is about funding the final development and production of the Company’s three advanced battery cells where we see significant commercial opportunities.”
From the increased market uptake of electric vehicles and personal devices, to growing environmental concerns and increasing regulation and political pressure to shift away from the use of fossil fuels, as exemplified by the UK Government’s plan for a “Green Industrial Revolution”, there has been a rapid rise in global demand for lithium-ion and lithium-ion derivative battery cells. Traditionally, the dominant market for lithium-ion batteries was consumer electronics, however over recent years, the automotive sector has become increasingly responsible for the substantial increase in demand, as electrification of vehicles has become a legislative requirement in many major nations, particularly in Europe.
This has contributed to the value of the global lithium-ion cells market, which the Company is targeting, being forecast to grow in value by 15 per cent. per annum from 2020 to 2030, to approximately US$110 billion, on the back of a 22 per cent. per annum growth in volume (source: Bloomberg NEF 2019). At a time of significant impetus in the battery cell market, the Directors’ objective is for AMTE Power to become the supplier of choice for customers whose highly scalable, specialist needs are not, in their experience, being fully addressed by the major international cell manufacturers, by being a leading participant in the development and commercialisation of innovative, highly differentiated battery cell products. AMTE Power is focusing initially on three specialist markets.
The Company’s most developed product for the automotive battery cell market is Ultra High Power, a re-chargeable pouch format battery cell. Ultra High Power is being developed in conjunction with several specialist manufacturers in the automotive industry and has the ability to deliver power consistently at a very high rate, thereby enhancing acceleration in high-performance vehicles.
The Directors consider Ultra High Power to be a cell that is highly differentiated from other automotive cells, and to be of particular interest to the high-performance motor industry. The Ultra High Power cell has undergone early testing by third parties and the Company is currently in discussions with ten key automotive and motorsport manufacturers to test and evaluate the products for inclusion of the cell in their vehicle programmes.
Oil & Gas
The Company’s cell for the oil and gas market is Ultra Prime, a single use cylindrical battery cell. Ultra Prime is being designed with very high-energy and high-temperature performance for use in challenging environments. In addition to these features, the Ultra Prime cell has a very long standby life with no loss of performance, making it ideal for use, not only where restricted access is a key consideration, but also where the battery needs to be in situ for an extended period. The Directors believe, based on early development work, that Ultra Prime will have the capability to operate for up to six years at a temperature of 125°C.
Ultra Prime is the subject of AMTE Power’s first commercialisation contract, a seven-year development and supply agreement with a UK based, international, Tier 1 oil and gas industry equipment provider. The Company has agreed to develop and, subject to the achievement of milestones, to supply to the customer battery cells which can be manufactured at the Company’s Thurso facility. The Company is also in discussions with a potential customer in the defence market concerning Ultra Prime.
The Company’s differentiated product for the ESS cell market is Ultra Safe. Ultra Safe is being designed as a safe and cost-effective re-chargeable pouch format battery cell to address key applications in energy storage systems, whether microgrids (self-sufficient energy systems serving discrete geographic locations) or larger systems.
Ultra Safe is based chemically on sodium, an element which is more readily available, and at a significantly lower price, than lithium. In the ESS market, sodium-ion also has a safer thermal structure than lithium-ion and has the ability to operate in a broader temperature range.
The Board considers that Ultra Safe, while at an earlier stage than the other differentiated cells, has the greatest opportunity to be a transformational product, given its substantial potential advantages over lithium-ion as a storage medium, in terms of safety and cost.
In order to facilitate market access, the Company has entered into a memorandum of understanding in respect of a proposed joint venture with InfraNomics Pty. Ltd, an Australian company which developed the strategy for Lithium Valley, a substantial battery supply chain initiative in Australia.