Next Steps in Bond Approval Process for Origin Materials US Megasite

On the Agenda

This past week, it was revealed via the Louisiana State Bond Commission posting its preliminary for its December meeting that the final approval of the private activity bonds to fund Origin's Geismar facility are on the agenda:

Here's my article on that development.

What Comes Next?

The LA State Bond Commission's monthly meeting is set for December 15, 2022. The meeting is set for 8:00am - Central Standard Time.

The next step, assuming S22-051 is approved, will be for 30 days to pass in order to allow for anyone to file suit to object/prevent the issuance of the bonds. During that time period, the bond counsel will establish a closing date and prepare the closing documents. The closing date could be as early as January 15, 2023.

At closing, the purchase price of the bonds are exchanged for the bonds and the amount raised from the bonds (up to $1.5 billion) would the be deposited for the benefit of Origin Materials. Also at closing, the company would owe the closing fees to the Louisiana Public Facilities Authority and Bond Commission. At this point, it is unclear how much the closing costs would be on $1.5 billion of bonds.

The company has cash, cash equivalents and marketable securities in the amount of $362.2 million as of September 30, 2022. They are also set to potentially receive $100 million in incentives from the state of Louisiana and Ascension Parish.

The 150-acre land site for the Origin 2 facility has already been paid for. From the latest 10-Q:

Louisiana Has Already Authorized $1.1B in Bonds for Strategic Biofuels

Strategic Biofuels received the approval in September for tax-exempt revenue bonds, in the amount of $1.1 billion, to build their plant in the Caldwell Parish at the Port of Columbia. They plan to produce diesel fuel made from plant waste. After getting the authorization news in September, they have begun to break ground on their upcoming plant.

The reason I mention this company is that it is in a similar space to Origin Materials, and they have already been greenlit by the Bond Commission for similar financing.

Origin Megasite Timetable

According to the latest investor presentation, front-end engineering design on the Geismar Megasite (O2) is expected to be completed by the end of Q1 2023, by which time the fate of the private activity bonds will be determined. Hunt, Guillot & Associates "will provide full-service engineering to support and augment Origin in all phases of the project, from early design to construction, logistics, planning, detailed scheduling, cost forecasts, progress tracking and reporting, and work stream integration." 

Construction of O2 is expected to begin Q2 2023, being mechanically complete by Q1 2025 and operating later that year.

For now, we await to hear word that the Louisiana State Bond Commission has given final authorization for Origin's proposed revenue bonds. I will personally be making that phone call next Thursday morning and hope to hear a good word.