Loop Energy Inc. (TSX:LPEN), which makes hydrogen fuel cells, is amalgamating with another local company in the hydrogen space.
Loop Energy and H2 Portable Power Corp. announced that they plan to amalgamate. H2P makes industrial equipment for the hydrogen fuel sector.
Under the arrangement, a subsidiary of Loop will acquire all of H2P’s issued and outstanding shares, with H2P shareholders receiving common shares in Loop.
Loop shareholders will end up owning between nine and 9.6 per cent of new “combined entity” shares, and H2P shareholders will own 60.5 to 62 per cent of the combined entity shares.
The amalgamation will give H2P a “backdoor listing” on the Toronto Stock Exchange. As part of the transaction, H2P plans to raise $15 million through a brokered private placement to provide “growth capital and stability to the combined entity.”
H2P will also provide Loop with $2 million, including $500,000 for “certain fixed assets” and a $1.5 million bridge loan.
“Significant cost and operational savings will be implemented immediately upon closing of the transaction including downsizing Loop’s leased real estate portfolio, selling non-core equipment and rationalizing operating expenses,” Loop said in a press release.
The proposed amalgamation is subject to approval by Loop shareholders at a special meeting in April.