On February 23, Scandinavian Enviro Systems (Enviro) has received an initial payment for costs incurred relating to the plant in Uddevalla, Sweden. The payment has been made by the joint venture established by Enviro and Antin Infrastructure Partners. In this initial stage, Enviro has received a payment of MSEK 53 million, of which MSEK 26.5 in cash and MSEK 26.5 in the form of shares in the joint venture. As previously communicated, Enviro has an option to acquire an ownership share in the joint venture that over time will ultimately correspond to approximately 30 percent. Enviro intends to fully exercise this option.

The payment covers part of the costs incurred by Enviro for establishing the full-scale recycling plant for end-of-life tires in Uddevalla and Enviro will receive further payments to cover these costs. Construction of the plant in Uddevalla commenced last week.

In addition to the cash payment of MSEK 26.5, Enviro also received shares in the joint venture. Enviro’s stake in the joint venture will fluctuate in pace with the capitalization process for the joint venture, but over time Enviro is entitled to acquire an ownership share that ultimately corresponds to approximately 30 percent.

The joint venture will be the world’s first large-scale tire recycling company, combining Enviro’s unique patented technology for extracting carbon black and pyrolysis oil from end-of-life tires with Antin’s expertise in developing and scaling up future infrastructure platforms. The joint venture plans to construct plants across Europe targeting a total annual recycling capacity of up to one million metric tons of end-of-life tires by 2030. Enviro and Antin Infrastructure NextGen fund have previously agreed on a plan for financing the construction of the plants.

As previously communicated, Enviro will receive revenue through both service fees and an asset fee based on the profitability of the respective plants while the company will have the possibility of building up long-term value through ownership in the joint venture.

Press release by Enviro.