Tritium DCFC Limited, a global developer and manufacturer of direct current fast chargers for electric vehicles (EVs), has announced entry into a $150 million debt facility. This is provided by a consortium of investors, in addition to a committed equity facility established with B. Riley Principal Capital II, LLC, for up to $75 million.
This capital injection will be used to fund working capital, product development and operational support and expansion. The working capital will position the company to accelerate production and satisfy the large number of orders on hand from Tritium’s diversified blue-chip customer base.
This is exciting news for the company at a time when demand for infrastructure is growing at a rapid rate. Plus, the addition of fast chargers at any charging station is only going to help the transition to electric vehicles.
In addition to tremendous electric vehicle industry growth over the past year backed by government incentives and carbon reduction targets, Tritium continues to see high demand from new and existing customers. These are from around the globe as the company continues its growth trajectory and expansion in the Americas, Europe and Asia.
Jane Hunter, Tritium CEO, said: “Transportation is electrifying at a breakneck pace. Tritium’s cutting-edge technology and culture of innovation provide the company with the tools to create top-tier fast charging hardware, software and services, and now we have additional capital to scale.
“We look forward to using this investment to accelerate production, expedite product development, and, ultimately, to continue our pursuit of becoming the number one fast charger manufacturer on the planet.”
The $150 million senior debt facility will refinance the existing $90 million facility and provide a net injection of $60 million. The facility has a three-year term and 8.5 percent cash coupon supplemented with the issuance to the lenders or their affiliates of warrants for the purchase of ordinary shares of the company.
The consortium providing the facility comprises long-term supporter Cigna Investments, Inc. (Cigna), the investment arm of Cigna Corporation, a US-based global health services company, in addition to Barings LLC (Barings), a leading global financial services firm and subsidiary of MassMutual, a US-based mutual insurance company, and Riverstone Energy Limited.
David Toomey, Tritium’s Head of Corporate Development, said: “The strength of Tritium’s global market position, its differentiated technology along with high demand from public charging operators and fleets for Tritium’s products have presented a very compelling case to these debt investors.
“Tritium has an enviable revenue model, which requires relatively low amounts of capital expenditure to reach scale as the company specialises in DC fast charging products to blue chip, high-volume buyers.
“We particularly appreciate the continued long-term support of Cigna and Barings, who have been longstanding partners to Tritium, as we contribute to the global mission to electrify transportation.”
“Increasing the senior debt facility is a true testament to the team and Tritium’s DNA as the company continues to mature credit-worthy business fundamentals attracting international debt investors.”
The committed equity facility was established with B. Riley Principal Capital II, a subsidiary of a publicly traded, diversified financial services company. The committed equity facility will provide Tritium with the right, without obligation, to sell and issue up to $75 million of its ordinary shares to B. Riley at Tritium’s sole discretion, subject to certain limitations and conditions.
Michael Hipwood, Tritium CFO, said: “These investments will put Tritium in a strong position to meet growing demand for DC fast chargers across the globe.
“I have full confidence in both the cleantech industry and Tritium’s ability to lead DC fast charging. The capital will allow Tritium to invest in new production capacity and product development to achieve revenue goals.”
This news follows Tritium’s recent opening of its first fast charger factory in the United States and the company’s largest manufacturing facility in the world. The factory is designed to produce up to 30,000 fast chargers per year and is expected to comply with the Federal Highway Administration (FHWA) Buy America Act by the first calendar quarter of 2023.
Additionally, over the last several months, Tritium has announced a string of sales to customers all around the world, including BP, Shell, Enel X Way and EVCS, one of the largest and fastest-growing electric vehicle charging networks on the West Coast of the United States.
The world has seen demand for EVs skyrocket in recent years. This has been fuelled by goals to reduce carbon emissions, government incentives for vehicles and charging infrastructure and consumer demand.
In the United States, the recently passed National Electric Vehicle Infrastructure (NEVI) Formula Program provided $5 billion to build a coast-to-coast EV fast charging network. The Inflation Reduction Act also includes tax incentives for businesses to build EV fleets.
EV adoption in Europe has been driven by aggressive European Union (EU) CO2 reduction standards. In 2021, one of every 11 cars sold in the EU was electric. That same year, the market share for battery electric vehicles in Europe was 9.1 percent, according to the European Automobile Manufacturers Association (ACEA). This is a 1.9 percent increase over 2019.
The EU hopes to reduce carbon emissions to at least 55 percent below 1990 levels by 2030. These targets will drive further EV adoption across Europe. The EV market is growing exponentially across the globe, and Tritium is poised to meet the demand for a robust infrastructure of DC fast chargers.