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Velocys Shares Jump On £27m UK Department for Transport Grant

Sam Boughedda
Sam Boughedda trader
Updated 12 Dec 2022

Velocys (LON: VLS) jumped in early Monday trading after the company announced its Altalto Immingham Ltd subsidiary was awarded an up to £27 million grant from the UK Department for Transport’s (DfT) Advanced Fuels Fun.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The grant is for the Altalto Immingham Sustainable Aviation Fuel (SAF) project being developed under a Joint Development Agreement between British Airways and Velocys. It will be used by Altalto Immingham to deliver the Front-End Engineering Design stage of the project.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

The project aims to deliver a commercial waste-to-SAF plant in Immingham, UK, with the grant distributed from December 2022 to March 2025. However, there is a condition that the grant has to be matched by private sector funding, although the company said it has already obtained Letters of Intent from several existing and new potential partners for the funding requirement. The first tranche of private funding is set to be in place by April 2023.

Velocys’ cash contribution to the project over the two years from April is not expected to be more than £8 million, although it may be reduced by bringing in additional investors.

“We are extremely pleased the UK Government has awarded Velocys this important grant which will deliver the FEED stage for our Altalto Immingham reference project accelerating the commercial deployment of Velocys’ technology and delivering cashflow,” commented Henrik Wareborn, Velocys CEO.

“We are delighted that a number of large commercial companies have indicated their support for the project through indications of matched funding contribution and the provision of services to progress the project.”

Velocys shares are currently up 19% at 5.235p per share. However, they hit a high of 5.8p earlier in the session. Despite the rise, the stock is still down this year.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.