Amaero lured to UAE – Victoria loses out on new plant

The reason why additive manufacturing group Amaero abandoned plans to build a titanium alloy powders plant in Victoria has been revealed in a statement to the ASX.

The plant will instead be constructed in the United Arab Emirates supported by investment funds made possible by that country’s defence offsets programme.

In September Amaero dumped a long promised Victorian titanium alloy plant, though then it did not give a reason other than to say that it was the outcome of a strategic review, now completed.

As recently as June this year Amaero had reported that the Melbourne plant was on-schedule for production-readiness by the end of the year.

However now Amaero has revealed a renounceable entitlement offer to raise up to $10.5 million as part of plans to form a joint venture with UAE based partner Technology Holding Company LLC, an affiliate of Ethmar Holdings.

The capital raising has been sub-underwritten by an entity controlled by Hank Holland who was also named as ‘chairman and CEO’.

Former CEO Barrie Finnin was also named as chief technology officer and manager of Australian operations.

The JV will be for the purpose of producing ‘titanium, aluminium and super allow powders in the UAE’.

Capital for the new plant would be funded by a ‘US defence offset obligor’, also referred to as a strategic funder.

Defence offsets are utilised by dozens of nations to boost domestic industries as part of international defence equipment purchases.

Amaero told the ASX: “The estimated cost for capital investment (facility, improvements, equipment and inventory) is approximately A$290 million, which is expected to be funded by the strategic funder.”

It is expected that a ‘large scale production’ facility would be sited in Abu Dhabi.

Australia does not have a defence offsets programme, though they were in place for defence purchases in the past.

Further reading:
AMAERO REVAMPS LEADERSHIP, DUMPS PLANNED VICTORIAN FACTORY
UPCOMING MELBOURNE TITANIUM POWDER FACTORY ON TRACK: AMAERO

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