ET Power and Rice Acquisition Corp. II have announced an additional $275m of PIPE commitments in connection with their proposed business combination, according to a news release.
Occidental has increased its commitment to the PIPE by $250m, bringing its total investment to $350m, while the Rice family has committed an additional $25m, bringing their total investment to $125m.
“We believe NET Power’s technology can accelerate emissions reductions in our existing operations and ultimately supply emissions-free power to the Direct Air Capture facilities and sequestration hubs we are developing, the release states.”
The new commitments bring the expected gross proceeds of the business combination to $845m for NET Power, consisting of approximately $345m from RONI’s trust account (assuming no redemptions), and approximately $500m from the PIPE raised entirely at $10 per share of common stock.
Assuming no RONI shareholders exercise their redemption rights, the combined company is expected to have a market capitalization in excess of $2bn.
“Since announcing the transaction in December 2022, NET Power has continued to make excellent progress towards commercialization of its utility-scale power plant, including FEED commencement on the Occidental-hosted Serial Number 1 (“SN1”) project near Odessa, Texas,” the release states. “In support of the plant, NET Power expects Occidental will be a key offtaker of the clean power generated by SN1.”
It is anticipated that Occidental will manage the transportation, storage, and utilization of the captured CO2 from SN1.
“We believe NET Power’s technology can accelerate emissions reductions in our existing operations and ultimately supply emissions-free power to the Direct Air Capture facilities and sequestration hubs we are developing,” Vicki Hollub, president and CEO of Occidental, said in the release.
Following this additional commitment, Occidental’s ownership stake in the combined company will increase to approximately 39%, assuming no redemptions.
NET Power expects $200m of net proceeds from the business combination and the PIPE to fully fund corporate operations through commercialization of SN1, which is expected to be operational in 2026.
The net proceeds above $200m are expected to support SN1 capital needs and future commercial origination efforts.
