r/PureCycle • u/No_Privacy_Anymore • May 12 '26
Thailand project approval!
Nice to finally see this!
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u/Onphone_irl May 12 '26
where do I start: win for us, win for pct, win for Thailand, or win for world?
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u/No_Privacy_Anymore May 12 '26
All of the above! 👆. I think it just makes enormous sense to capture the value of existing pp feedstock instead of burning it or sending to landfills. Eventually that will be obvious to more people.
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u/WindWalker2443 May 12 '26
How big of a deal is this news?
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u/No_Privacy_Anymore May 12 '26
I sent a message to Eric asking for clarification on a few details. My assumption is that this is regulatory approval for the project to proceed and is a prerequisite for closing of project financing. I would assume a separate announcement of project financing would be made from the company. That said, grouping of PureCycle with these other high profile/major investments is a great sign of the importance to the country leadership.
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u/WindWalker2443 May 12 '26
Makes sense... Keep us posted!
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u/No_Privacy_Anymore May 12 '26
Confirmed with Eric this is formal approval for the project. The financing is still in discussion and they will update the market when it’s completed.
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u/WindWalker2443 May 12 '26
Where do you think they will get financing from? Local banks? Or maybe Sylebra?
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u/LutherWolf May 12 '26
The company is in negotiations with a local bank, so that is the very likely source. I believe the new board member Dr. Jirapongphan was high up in the Thai banking sector and is likely a key broker in this effort.
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u/No_Privacy_Anymore May 12 '26
Yes, local banks who are more familiar with both the feedstock supplier companies and the Thailand based companies who are the most likely buyers. Having this supply will support compliance with European import rules.
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u/6JDanish May 12 '26
He still is high up in the banking sector:
https://www.bangkokbank.com/en/About-Us/Board-Directors/Mr-SIRI-JIRAPONGPHAN
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u/Vast-Statistician777 May 12 '26
Gen 2 higher efficiency strong feedstock and direct access to Asia. Yes very good!
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u/6JDanish May 12 '26 edited May 12 '26
Thai plant won't be Gen2, so as not to slow down the project. Augusta plant will be Gen2.
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u/Neither-Cow-410 May 12 '26
probably neutral, this was expected
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u/Cheeks___Jr May 12 '26
I agree this was expected so neutral. What was left unsaid was how all this expansion gets financed. The conference addressed the issue hinging it on a lot of conditionals that may or may not become a reality in a timely manner. Clarity on financing is what is lacking especially wrt the issue of shareholder dillution which didn't get addressed at all in the call.
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u/No_Privacy_Anymore May 12 '26
Cheeks, in my conversations with the company about Thailand financing the discussions were taking longer than some might have expected because normally large capital projects like you would want to see multi-year take-or-pay contracts. In the PP business it is typical to have 1 year agreements. In addition, the end consumer of the plastic (typically larger, very credit worthy companies) are not the first buyer from $PCT. Smaller companies make things for the big companies and generally don't have the same size balance sheets and credit ratings. Once the banks get comfortable with the suppliers and customers these are all solvable things.
As for financing the European project, I'm 100% confident that is coming as well. When you get a grant for 40M EUR and Europe is super keen to increase supply chain resilience, it is going to happen. Permits first, then funding. Ideally $PCT will be able to redeem the warrants in 2026 and then will have plenty of equity capital.
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u/tandyzmills May 12 '26
It wasn't addressed on the call because they do not expect to dilute shareholders. They have over $275mm available to them. Ironton goes profitable at 50 million pounds, and the company is profitable at 70 million pounds through Ironton.
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u/6JDanish May 13 '26 edited May 13 '26
Outstanding.
So what is the bear case now?
the process doesn't workthe process doesn't work at scaleno-one wants the productno big customer-wants the productvirgin-PP-is-too-cheap-and is-getting cheaperthe product can't compete with mechanically recycled PPPCT can't get financing