Engaged in the clothing industry for 20 years.
Renewcell secures SEK 100 million capital injection amid strategic review
Material innovator Renewcell has said that it has entered into loan agreements totalling 100 million Swedish krona as it continues down the path of a strategic review and looks to resolve short-term liquidity issues.
One of the financial arrangements had been made with two of its major shareholders, H&M Fashion and Girincubator, which have agreed to provide SEK 50 million as a short-term loan.
An additional SEK 50 million has been secured from existing lenders, such as BNP Paribas, European Investment Bank, Nordea Bank Abp, Filial i Sverige and AB Svensk Exportkredit.
The company embarked on a strategic review towards the end of November in order to evaluate funding options due to “lower than anticipated sales volumes” in the textile value chain.
H&M ramps up Circulose orders
In a release, Renewcell said: “Today’s capital injection is expected to be sufficient to handle the liquidity required for the coming months and is therefore not a long-term solution.”
As such, it was confirmed that the strategic review remained ongoing with the aim to secure long-term financing during the first quarter of 2024, with alternatives being that of an equity injection in the form of a rights issue or a directed issue.
Further attempts to bump up orders have involved intensifying discussions with current partners, including H&M Group, which has now cemented its intention to acquire 7,000 metric tonnes of fibre containing Renewcell’s Circulose pulp during 2024 and a further 11,000 metric tonnes during 2025.
Renewcell added: “Given the company’s liquidity position and as the time for the ramp up of sales is still uncertain and the company’s liquidity outlook will continue to be dependent on sales and the dynamics with the company’s supply chain partners, the strategic review remains ongoing in order to secure long-term funding during the first quarter of 2024 and optimise shareholder value.”