The owner of a municipal-bond-financed plastic recycling plant in Ohio says the project’s bumpy ride is smoothing out.
PureCycle Technologies plans to continue selling revenue bonds that it bought back from investors earlier this year, company leaders said in a
The firm’s struggles to construct its plastics recycling operation in Ironton, Ohio, amid delays and disputes with contractors led
Chief Executive Officer Dustin Olson
The company has since, after removing most of the bond covenants, sold many of those bonds onward.
Chief Financial Officer Jaime Vasquez said in the earnings call that on top of the $18 million in proceeds from revenue bond sales earlier in the third quarter, gained from selling $22.5 million par value of the 2020 revenue bonds, PureCycle raised $90 million in September by entering into subscription agreements with certain investors “where we saw the combination of preferred stock, common stock and warrants.”
In May, according to
Vasquez said on the third-quarter earnings call that the company plans to sell $118 million more of those revenue bonds over the next several months “that should further support our liquidity needs in 2025.”
Olson in
Olson said the proceeds from the Ironton revenue bonds and the September capital raise generated over $105 million in net proceeds.
PureCycle spokesperson Christian Bruey said PureCycle would not comment on the upcoming sale of revenue bonds. He did not respond to questions about PureCycle’s outstanding debt.
The Southern Ohio Port Authority issued three series of tax-exempt facility revenue bonds for PureCycle’s Ironton facility, its first polypropylene purification plant, in 2020, according to
The bonds were originally issued to finance the factory, which recycles used plastics to create what PureCycle says are like-new plastic resins.
Construction of the factory
“Will PureCycle continue to operate at high levels at Ironton? We’re getting a check mark there,” Olson said on the earnings call last week. “Will the quality be sufficient for that application? We’re getting a check mark there. And do you have the inventory and capabilities to meet the demand? And we’ve been able to build inventory across the quarter as well.”
“We had a lot of constraints ramping up this facility over the last six to nine months,” Olson said of Ironton.
“But the solution that we put in place there has really unbridled the capacity at Ironton, and we feel really good about that,” he said.
Olson added, “We have an asset at Ironton that we can control that will do what we ask it to do… In order to get to breakeven at the Ironton facility, we need between 40% and 50% utilization at the facility. And in order to get to breakeven for the company, not including capex spend, it takes 80% to 90% rate at Ironton. And we still hold to that. We’ve been doing a lot of modeling.”
PureCycle trades on the Nasdaq under ticker PCT. Its share price closed at $12.66 Tuesday. It was as low as $2.38 in January.