Australian solar outfit heads for New York listing after deal

Australian solar power technology outfit Vast Solar is heading for a listing on the New York Stock Exchange after inking a deal with so-called blank cheque company Nabors Energy Transition Corp that values the combined group at up to $US586 million ($840 million).

The proposed deal, announced overnight Australian time, is set to provide funds of up to $US351 million to Vast Solar, effectively locking in the equity financing needed for a $203 million project using the technology to be built in South Australia.

Vast Solar this week won $65 million of funding from the Australia Renewable Energy Agency for its VS1 concentrated solar project near Port Augusta, for which a concessional federal government loan is also under negotiation.

The funds raised through the US deal would also support the development of other projects in target markets and the deployment of manufacturing plants – initially in Australia – to support the roll-out of third-party projects using Vast Solar’s technology.

Vast Solar chief executive Craig Wood said the deal with Nabors Energy, an affiliate of US-listed oil and gas drilling fleet owner Nabors Industries, would accelerate the deployment of the Australian company’s technology globally, starting with the Port Augusta project.

The decision to proceed with a deal with the US special purpose acquisition (SPAC) company – a sector that has fallen out of favour over the last 18 months as IPO windows have shut around the world – followed the consideration of other funding options to support Vast Solar’s capital-intensive development plans,

“The US capital markets are just deeper than what’s available in Australia, which both now and in the medium to longer term plays into things,” Mr Wood told The Australian Financial Review.

He also pointed to strategic benefits from linking up with Nabors, a key supplier of drilling services to Saudi Aramco, including access to two of Vast Solar’s target markets, the US and Middle East.

Vast Solar’s current owner, AGCentral owned by Johnny Kahlbetzer of the Rich Lister Kahlbetzer family, will put an additional $US15 million of new equity into the combined company, as will Nabors. The existing owners would not take any money off the table, Mr Wood said.

The deal should result in the listing of Vast shares on the New York Stock Exchange around the end of the June quarter or early in the September quarter. Where the valuation of the combined company would land in between the cited range of $US305 million and $US586 million would depend on the redemption rate during the listing process, with typical redemptions in the recent past of 80-90 per cent suggesting it would land toward the lower end, Mr Wood said.

Nabors Energy president and CEO Anthony Petrello endorsed the potential of Vast Solar’s technology, which is intended to beat the weather-dependence of solar power by combining solar power generation with a sodium-based energy gathering system and a storage system using molten salt. The energy can be later used as either electricity or heat.

Mr Petrello said the process “has the potential to deliver low-cost, clean, renewable and dispatchable power and heat, a combination that no other technology has yet been able to achieve”.

“We believe Vast is a unique entry point into a market with massive growth potential,” he told investors on a teleconference.

The VS1 project, which is targeted for a final investment decision in the December quarter, is set to be the first utility-scale plant utilising the technology.

Vast has several others in earlier stages of development, including a solar methanol project at Port Augusta, a 50MW concentrated solar project in Mount Isa and a 150MW project in Port Augusta that would follow the others once they are completed.

Vast will remain headquartered in Sydney and will retain its name after completion of the deal.

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