Lhyfe launches its initial public offering (IPO) on the regulated market of Euronext ® in Paris to become a leading European green hydrogen producer.
Lhyfe (the “Company”), an independent producer for low carbon industry and mobility, announces the launch of its initial public offering with a view to the admission of its shares to trading on the regulated market of Euronext in Paris (ISIN: FR0014009YQ1 – ticker: LHYFE).
On May 6, 2022, the Autorité des marchés financiers (AMF) approved the Company’s Prospectus under number 22-133, comprising the registration document approved on April 21, 2022 under number I.22-009 (the “Registration Document”), a supplement to the Registration Document approved on May 6, 2022 under number I.22-020 and a securities note (Note d’opération) including a Prospectus summary (included in the securities note) (the “Prospectus”).
Matthieu Guesné, Founder and CEO of Lhyfe:
It is with great ambition that today, we are launching our IPO, a new historical stage in Lhyfe’s development.
“Replacing grey hydrogen from fossil energies, with green hydrogen is a key element of energy transition. The green hydrogen produced by Lhyfe is supporting industrial decarbonization, reducing transport-related CO2 emissions and helping strengthen Europe’s energy independence.”
“Demand for green hydrogen is expected to rise significantly over the next few years and our ambition is for Lhyfe to become one of the leading producers of green hydrogen in Europe.”
“e have been producing green hydrogen in France since 2021 and are now one of the most advanced operators in Europe with a pipeline of more than 4.8 GW in total installed capacity (i.e. output of more than 1,620 tonnes of green hydrogen per day) via 93 projects in Europe.”
“Several major international companies such as Wpd, Mitsui, Plug Power and now EDPR have chosen to partner with Lhyfe in accelerating green hydrogen development.”
“We founded Lhyfe with the aim of having a strong positive impact on the future of our planet. The daily ambition of Lhyfe’s men and women is to do good for the planet while creating value. We would like you to join us in our ambition to make Lhyfe a European leader in the green hydrogen sector.”
Lhyfe, an independent French pure player in the production of green hydrogen to help decarbonize mobility and industry
Started as project in 2017 by Matthieu Guesné, the former head of CEA Tech Pays de la Loire et Bretagne, Lhyfe pioneers the production of green hydrogen from renewable energies only.
Green hydrogen is made from water electrolysis: a totally carbon-free process consisting of separating hydrogen and oxygen atoms from water molecule using electricity. This technique allows to:
- replace fossil hydrogen (made from hydrocarbons, also called grey hydrogen) consumed in large quantities in industry;
- be used as a clean fuel in mobility, transport and logistics;
- partially replace natural gas (also fossil) by a clean gas, green hydrogen, in gas grids, industry and transports.
Grey hydrogen production derived from fossil energy sources (oil, natural gas and coal), is a highly CO2 emitting process, currently representing 98%[3] of hydrogen production.
Replacing it with green hydrogen is a key energy transition challenge. Global demand is expected to increase six-fold over 2020-2050[4] to reach 530 million tonnes by 2050, driven by economic growth and the expansion of uses, both in industry and mobility.
Green hydrogen should represent 60%2 of total hydrogen demand in 2050.
The world’s first green hydrogen production facility directly connected to a wind farm
Green hydrogen is today produced by Lhyfe in a decentralized local plant directly linked to a renewable energy farm.
It is sold directly to end-users, among which transport players (conurbations, transporters, logistics platforms, etc.) and chemicals industrial producers (ammonia and methanol), steel and glass.
In September 2021, Lhyfe opened the world’s first industrial site with a direct link to a wind farm and seawater supplies for electrolysis. This has now started delivering its first kilograms of green hydrogen.
Located in Bouin in Vendée (France), the site has a production capacity of 750 kW or around 300 kg of green hydrogen per day. This is expected to increase to 2.5 MW by 2023 (around 1 tonne per day) to meet growing demand.
As a central player in the green hydrogen value chain, Lhyfe provides the link between renewables and the decarbonization of uses in mobility and industry sectors.
A pipeline of 93 onshore projects[5] representing over 4.8 GW total installed capacity
Lhyfe is growing fast and its technical and commercial skills have won it a significant place on the market within a few years. The Company is present in 10 European countries and has 82 employees to date, more than 25 of whom are dedicated to business development.
Lhyfe’s development is backed by a solid commercial portfolio of 93 onshore projects[6] to date across Europe, representing a total installed production capacity of over 4.8 GW (estimated production: over 1,620 tonnes of green hydrogen/day) by 2028.
Of these 93 projects, 20 are at an advanced development stage (“Tender-ready”, “Awarded” or “Construction” phases) and represent 380.5 MW total capacity that is expected to become operational between 2023 and 2026.
An ecosystem of leading partners: Mitsui, wpd, Plug Power, SWEN, Andera Partners, etc.
To support its development, Lhyfe has also established major development partnerships, genuine recognition of its expertise in the field.
In April 2022, Lhyfe signed a memorandum of understanding to design, build and operate a green hydrogen production site in Storgrundet, Sweden, with an installed capacity of 600 MW (i.e. estimated production of 240 tonnes of green hydrogen/day), directly connected to an offshore wind farm to be built by wpd in the North Sea off the coast of Söderhamn (Sweden).
The site is set to be built in several phases, beginning in 2025, and should be fully operational by the time the wind farm is commissioned.
This green hydrogen production project, one of the most ambitious in Europe, offers strong connection potential with the “Nordic Hydrogen Backbone” (the Nordic gas transport network) and industries and ongoing projects in the region offer several potential opportunities for renewable hydrogen produced at the future site.
In March 2022, Lhyfe also signed a memorandum of understanding with a view to form a strategic alliance with Mitsui & Co Ltd., one of Japan’s leading commercial and investment conglomerates, with an investment of approximately €10 million by Mitsui in convertible bonds (that will be automatically converted into shares on the date of settlement-delivery of the Company’s shares in the context of its IPO).
Beyond this investment, the strategic alliance aims notably to support Lhyfe in its international expansion into new strategic markets and to profit from Mitsui’s infrastructure, mobility, and energy solutions ecosystem.
In October 2021, Lhyfe also initiated discussions with Plug Power, a leading provider of turnkey hydrogen solutions for the global green hydrogen economy, for the joint development of green hydrogen production sites across Europe.
The objective would target a total hydrogen production capacity of 300 MW to be in operation by 2025. This objective is not included in the 2026 Company’s target (200 MW installed capacity) since the collaboration agreement is still being finalized.
Alongside these strategic and commercial partnerships, Lhyfe is supported by financial partners specialized in environmental transition, such as SWEN Capital Partners, la Caisse des Dépôts et Consignations (via Banque des Territoires) and Andera Partners, which participated, with Mitsui, in the Company’s most recent €76 million[7] funding round in the form of convertible bonds, around €47.8 million of which will be converted into shares simultaneously with the IPO.
Collaboration agreement with EDP Renováveis with €25 million investment in Lhyfe’s IPO
Lhyfe concluded on May 6, 2022 a collaboration agreement with EDP Renováveis, S.A. (EDPR), through its fully owned subsidiary EDP Renewables Europe.
EDPR, a Portuguese renewable energy company, listed on Euronext Lisbon (ISIN: ES0127797019), is a 75% subsidiary of EDP Group, historically the Portuguese national electricity producer, transporter, and distributor, also listed on Euronext Lisbon (ISIN: PTEDP0AM0009).
Active in more than 20 countries and with nearly 14 GW of installed renewable capacity, 52% of which is in North America, EDPR is the world’s 4th largest producer of wind electricity, combining onshore and offshore capacities, and also having solar capacities.
EDPR plans to deploy nearly 20 GW of additional capacity by 2025, representing an investment plan of nearly €19 billion.
Not only is EDPR a leader in renewable energy, it is also at the forefront of green hydrogen, in particular through its participation in GreenH2Atlantic project, a 100 MW green hydrogen production project in Sines (Portugal). EDPR’s ambition is to deploy 1.5 GW of green hydrogen production capacity by 2030.
This agreement sets the foundation for a collaboration between Lhyfe and EDPR to jointly originate, develop, engineer and manage green hydrogen projects.
In addition to supplying renewable electricity for Lhyfe’s green hydrogen projects, EDPR will also consider Lhyfe’s participation in its own projects located in countries where the group is currently present.
The two companies will also work together to identify new projects in which they could invest together, as well as in the fields of research & development and equipment supply.
This collaboration agreement comes with a subscription commitment of €25 million, as part of Lhyfe’s IPO on the regulated market of Euronext in Paris.
If EDPR were to hold 20% or more of Lhyfe’s capital, it will be suggested to Lhyfe’s shareholders to elect an EDPR representative to the Board of directors, who will also be a member of the Audit committee and the Nomination and compensation committee of the Company.
Becoming an independent European leader in onshore green hydrogen production
Based on the 93 projects currently in its pipeline, Lhyfe has set a target of reaching a total installed capacity of 55 MW by 2024 solely from onshore units.
In 2026, based on the assumptions disclosed in its Registration Document, total installed capacity should reach 200 MW, i.e. for the fiscal year ending December 31, 2026:
By 2030, the Company intends to be positioned as a key player in the green hydrogen production industry and more specifically to have over 3 GW in total installed capacity.
Long term, Lhyfe targets a Group EBITDA margin of more than 30%[10].
Lhyfe, a pioneer in offshore production: key for the massification of green hydrogen production for industry with the launch of an operating pilot in 2022
Since its creation, Lhyfe has been running a major research program for green hydrogen production at sea as close as possible to offshore sources of energy, which are the most abundant, powerful, least intermittent and therefore the most competitive source of renewable energy, to allow green hydrogen production massification for industrial uses.
As early as fall 2022, Lhyfe will be commissioning the first pilot offshore green hydrogen facility to operate under real conditions.
It will be the world’s first floating 1 MW electrolyzer and will be connected to a floating wind farm, making Lhyfe the only company in the world with offshore operating experience.
Lhyfe is also collaborating to develop various offshore green hydrogen production concepts: modular topsides with 50-100 MW capacity in partnership with Les Chantiers de l’Atlantique; offshore hydrogen production plant on existing oil rigs with the Aquaterra and Borr Drilling groups; and floating wind farms incorporating green hydrogen production systems with Doris, an offshore wind farm designer.
By 2030-2035, offshore could therefore represent around 3 GW additional installed capacity for Lhyfe.
An IPO on Euronext in Paris to support its growth strategy
Lhyfe’s IPO mainly intends to support its development and growth strategy.
The net proceeds of the offering, i.e. approximately €103 million (excluding the exercise of the extension clause and over-allotment option), will be used as follows:
- up to approximately 50%, to the equity contribution in the project companies carrying the group’s production units, (i.e. approximately 20% of the financing needs linked to investments in these same project companies) necessary to achieve the group’s 2026 objectives detailed above, given that the balance of total financing needs will be financed both by debt and by obtaining grants;
- approximately 35% to strengthen its business development and engineering teams in regions targeted by the group;
- approximately 8% to finance the group’s research and development programs, in particular those related to the development of technological solutions for green hydrogen production at sea and optimization of production costs and;
- the balance, of approximately 7%, for general corporate purposes.
Finally, the Company’s status as a listed company should also give it a greater visibility on markets, strengthening its position in industrial and commercial negotiations.
Subscription commitments: €25 million from EDPR and €7 to 14 million from institutional investors
The subscription commitment from EDPR, a 75% owned subsidiary of EDP Group, for €25 million is part of the conclusion of a collaboration agreement with Lhyfe to jointly originate, develop, engineer and manage green hydrogen production projects.
This order, placed at any price within the indicative price range, represents 22.7% of the offering’s gross proceeds (in case of a €110 million offer, excluding exercise of the extension clause and over-allotment option).
In addition to this subscription commitment, EDPR has agreed to a lock-up on the subscribed Lhyfe shares for a period of 360 days from the settlement-delivery of the offer.
Lhyfe has also received subscription commitments of €7 to 14 million from CDC Croissance and Amundsen Investments Management, for amounts of €5 to 10 million[11] and €2 to 4 million[12] respectively.
Orders from EDPR, CDC Croissance and Amundsen Investment Management are intended to be served in priority and entirely in order to ensure the success of the offer, it being specified that they may nevertheless be reduced in accordance with the usual allotment principles (mainly in case the subscriptions collected in the offer are much higher than the amount of €110 million corresponding to the gross proceeds of the new shares).
A strong ESG commitment: full alignment with EU taxonomy and a well above average non-financial rating (71/100)
Since its creation, Lhyfe has had ethics embedded in its DNA: ethics that relate to stakeholders, employees, environment and governance.
Lhyfe’s business is fully aligned with the European taxonomy for sustainable activities (hydrogen production), a sub-sector that European taxonomy identifies as contributing directly to the mitigation of climate change (EthiFinance – March 2022).
The Company’s commitment to ESG was confirmed in March 2022 when it obtained a non-financial rating of 71/100 (vs 46/100 average[13]) and an ‘Advanced’ maturity classification by EthiFinance, a non-financial rating agency.
Eligibility for PEA and PEA PME-ETI equity saving schemes – Classification as an “innovative business” by Bpifrance
Lhyfe announces that it meets the eligibility criteria for the PEA and PEA PME-ETI equity saving schemes, as defined by Articles L. 221-32-2 and D.221-113-5 et seq. of the French Monetary and Financial Code. As a result, Lhyfe shares may be fully included into PEA equity savings plans and PEA PME-ETI accounts by shareholders who are natural persons and resident in France for tax purposes.
Lhyfe has also been awarded the “innovative business” label by Bpifrance.
Availability of the Prospectus
The Prospectus contains a section that describes certain risk factors associated with the Company and the offering. The Prospectus can be downloaded from the Company’s website (www.lhyfe.com) and from AMF (www.amf-france.org), or can be obtained free of charge on request from the Company’s registered office at 30 rue Jean Jaurès, 44000 Nantes, France.
Investors are advised to pay careful attention to the risk factors described in Chapter 3 “Risk Factors” of the Registration Document and Chapter 2 “Risk Factors” of the securities note.
Highlights:
- Capital increase of around €110.0 million, which may reach a maximum of €145.5 million in case of full exercise of the extension clause and over-allotment option
- Completing the recent financing fundraisings of €76 million[1] through convertible bonds, of which around €47.8 million will be converted into shares on the settlement date of the IPO; the total amount of the capital increase could therefore reach a maximum of €193.3 million at most
- €32 million to €39 million of subscription commitments already secured:
- €25 million from EDP Renováveis (EDPR) under a collaboration agreement to develop green hydrogen production projects
- €7 million to €14 million from institutional investors CDC Croissance and Amundsen Investment Management[2]
- Indicative price range: between €8.75 and €11.75 per share
- Subscription period: from May 9, 2022 to May 19, 2022 (inclusive) for the Open Price Offer and until May 20, 2022 (12:00 CET) for the Global Placement
- A strong ESG commitment: full alignment with EU taxonomy and a well above average non-financial rating (71/100)
- Eligible for the PEA and PEA PME-ETI saving schemes- “Innovative company” qualification by Bpifrance
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Lhyfe launches its initial public offering (IPO) on the regulated market of Euronext® in Paris to become a leading European green hydrogen producer, May 5, 2022
