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French hydrogen group Lhyfe mulls new share issue

French green renewable hydrogen producer Lhyfe is exploring a possible issue of new shares to finance new projects, three sources close to the situation told this news service, although a spokesperson for the company said there are no plans in place.

Lhyfe, which listed last May on Euronext Paris in a EUR 118m IPO, has had early discussions with banks around a possible deal, although the process is still in the initial stages with no official mandates handed out, the sources said.  

A spokesperson for the company said: “The company has no plan to issue new shares and therefore has not mandated any bank.”

The extra equity financing would help fund several projects in the coming years, one source added. 

Lhyfe is likely to raise more debt in the future to fund its pipeline, this source added, but its projects are not yet bringing sufficient cash flow to justify adding more debt to its balance sheet.

The company had EUR 144.5m of available cash at the end of 2022, largely thanks to the capital raised through the IPO, according to its accounts.

It has not released more information on how much of this it has spent since then, although in February it said it had started building its second hydrogen project, in Brittany, and in April it began its third project, in Occitanie. It also has two projects under construction in Germany and one in Sweden.

Lhyfe, which currently has an EUR 335m market cap, has six major shareholders that hold 63.4% of the company and could participate in the deal, according to the sources.

These shareholders include company founder Matthieu Guesne (18.6%), Lille-based family investment firm Noria (15.7%), ADEME Investments-backed Vendee Hydrogene (9.8%), Les Saules (7.9%), EDP Renewables (6%) and Ouest Croissance (5.3%), according to public information. 

Before launching its IPO last May, Lhyfe secured separate equity investment from French infrastructure funds Andera Partners and SWEN Capital Partners, although the funds are not currently listed among Lhyfe’s main shareholders. It is unclear whether they exited at the IPO. Andera and SWEN did not respond to requests for comment.

In October 2021, SWEN led Lhyfe's second fundraising round through its SWEN Impact Fund for Transition (SWIFT), which raised EUR 50m with contributions also from Banque des Territoires and original investors. A few months later Andera announced a EUR 15m investment in Lhyfe as part of the company's third fundraising which collected EUR 17m in total. Ovive, part of Les Saules group, which invested in the two previous rounds of fundraising, made a EUR 2 million investment.

Lhyfe’s revenue last year was EUR 600,000 amid a commercial ramp-up in line with its growth plan, according to its website. Lhyfe's 2021 turnover was EUR 200,000 and its first production site was commissioned in H2 2021. 

Last year, the company reported an EBITDA loss of EUR 17m compared to a EUR 5m loss in 2021 as a result of an expanding workforce, structural expenses and more R&D studies for its green hydrogen offshore production demonstrator called the Sealhyfe platform.  

At the time of the IPO, the company had a pipeline of 93 onshore projects representing 4.8 GW of installed capacity.  

Around 20 of Lhyfe’s projects, worth 380.5 MW, were at an advanced development stage, ranging from tender-ready, awarded or construction phases, and were expected to come online between 2023 and 2026.

As of March 2023, the company had more than doubled these figures with a total pipeline of 9.8 GW, including 759 MW at an advanced stage of development. 

Lhyfe is aiming for 55 MW of total installed capacity by 2024 and by 2026 it is aiming to have installed 200 MW with a consolidated revenue of around EUR 200m, according to its website.