Braidy Industries Groundbreaking

Braidy Industries ground breaking fot the aluminum mill in East Park Friday. KEVIN GOLDY | THE DAILY INDEPENDENT

Braidy Industries is applying for $1 billion in debt financing from the federal Department of Energy to help finance its aluminum mill, according to federal filings, and the documents also show the financing for the Braidy mill is not yet committed.

The information about the debt financing application is contained in a document known as an offering statement for Braidy Industries that was filed with the Securities and Exchange Commission this week. The filing comes as Braidy announced it was launching a common stock offering and also as it announced it has acquired a company known as NanoAI LLC, which is described as a business that is in the science of nanocrystalline strengthening technology.

As part of the offering statement, Braidy outlines its directors, business and anticipated business plan. It also details a lengthy list of what are described as risk factors. Under risk factors it discusses the current financing situation for the $1.6 billion plant. The company states:

"The potential financing for the Braidy Atlas mill is not committed. The construction and development of the Braidy Atlas mill, which is currently expected to cost $1.68 billion, will require significant amounts of new financing and capital including from the proceeds of offerings. Any failure to raise the necessary capital means that Braidy Atlas will be unable to complete the construction of the mill."

The filings states Braidy has applied for $1 billion of debt financing under the Department of Energy's Advanced Technologies Vehicle Manufacturing program.

"Braidy Atlas is seeking a long-term (approximately 10-year maturity) low-cost financing based on US Treasury rates under the ATVM program for the construction of the mill. Braidy Industries also expects that Braidy Atlas may seek export credit support from the German government in an amount of up to $500 million to cover much of the expected cost of the equipment to be purchased."

The documents indicate Braidy has met with German officials but so far the application for such credit support has not been finalized.

The document goes on to say Braidy will need to raise at least $400 to $500 million in equity capital before Braidy Atlas "can raise sufficient debt financing for Braidy Atlas to fund construction."

Braidy executive Jaunique Sealey said in an email to The Daily Independent the mill's construction does not depend exclusively on approval of the application for the federal financing.

"The Offering Statement details the ATVM program administered by the U.S. Department of Energy and its role as a financing option with a more favorable interest rate relative to other traditionally-available sources," Sealey said. "It is one option among many other options for the debt portion of our project budget. Identifying a loan with a lower interest rate means that we spend less money each year on interest, which is a good thing for our investors and our business. There are many very good ways to direct the money that would be saved by electing a debt option that allows us to pay less annual interest - ways that benefit our mill, our community and Kentucky."

The newspaper asked Braidy what would happen if the federal debt financing is not approved.

"The ATVM loan is not our only option for debt financing and the Offering Statement does not contain that information," Sealey said. "The ATVM loan is simply a loan option available to us pursuant to a successful application that has a lower interest rate relative to other available options."

The newspaper asked if Braidy sought to finance the project through the private sector or is the use of federal money in the financing plan the only way the project is possible.

"Our financing efforts have been consistent as a largely private sector effort,” she said in the email. “As detailed in the Offering Statement, the ATVM loan is one option among many other options for the debt portion of our project budget. The ATVM loan just has a lower interest rate than other options, which makes it more favorable as an option."

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gpuit@dailyindependent.com

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