SK Global Chemicals acquires 10% stake in Loop Industries

Loop Industries announced that it intends to establish a strategic partnership with SK Global Chemicals (SKGC) Co.
, Ltd.
, a subsidiary of South Korea's SK Group
.

Shares of Loop Industries rose 13% after SK agreed to buy a 10% stake in the advanced recycling company
.
This partnership program will accelerate the commercialization of Loop Industries' sustainable PET plastic and polyester fiber manufacturing technology throughout Asia
.

In the deal, SK will acquire 4.
7 million new treasury common shares of Loop Industries for $12 per share, for a total of $56.
5 million, according to stock market information publication Seeking Alpha
.
Loop Industries intends to use the proceeds to fund its planned Infinite Loop manufacturing plant in Quebec, Canada
.

Under the MoU, SKGC will own 51% of the joint venture and Loop Industries will own 48%
.
Loop Industries will also receive a recurring annual royalty from each device that uses its technology, the release said
.

The SKGC press release states that preliminary discussions between the partners are to consider starting preparations for the first facility in South Korea in the second half of 2022
.
By 2030, they plan to build four facilities in Asia, and the total consumption of waste PET plastic and polyester fiber is expected to reach about 400,000 tons
.

SKGC was granted options to acquire an additional 462,298 shares of Loop Industries common stock at $11 per share over the next 12 months; 4,714,813 shares of common stock at $15 per share over the next three years; and An additional 2,357,407 shares were acquired for $20, depending on the timing of construction of the first Asian manufacturing facility
.