Analysis and Commentary

Carbon Revolution lives on, cupboard bare for Australian investors

Analysis and Commentary

By Peter Roberts

Shares in carbon fibre road wheel manufacturer Carbon Revolution disappeared from the ASX this week as the company’s shares began trading on the US NASDAQ exchange as Carbon Revolution Inc.

The US listing was the culmination of a drawn out fight for survival which will see the company continue to manufacture at its Geelong, Victoria facility but which sees the company pass into new hands and leave little to show Australian shareholders.

Survival for the company involved a business combination with New York listed Twin Ridge Capital Acquisition Corporation, with the shares trading under the CREV symbol at an opening price of US$7.45 and closing at US$29.32. on Friday.

The company then announced announced that it has received an initial investment of US$70 million from a structured equity facility of up to US$110 million from fund vehicles associated with investment company Orion Infrastructure Capital.

With a new, high powered board, and strong support from US investors, Carbon Revolution’s future is assured.

However the picture is not so rosy for Carbon Revolution Australian investors who saw its shares traded as high as $4.47 on the ASX in 2020 before slumping in 2021 and 2022.

The company ran into trouble during the Covid-19 pandemic with global automotive supply chains fracturing, and car makers closing factories and deferring new wheel programmes.

At the same time Carbon Revolution was investing heavily in a new mega-line production line at Geelong designed to improve output, efficiencies and product quality.

With its shares in freefall, the company had to go overseas to seek fresh capital, which it secured in the United States.

At the end of the day Carbon Revolution’s shares were selling for as low as 13.5 cents on the ASX.

Those shareholders left holding the parcel when the music stopped in Australia learned this week that they had been allocated 0.00643 shares in the new US company for every share they held.

CEO Jake Dingle was upbeat this week when delivering a video message on the new listing, saying it was performing well operationally and, critically, now had access to a deep pool of capital to make the most of its opportunities.

Dingle said: “The revolution has really hit the accelerator.”

A new beginning for Carbon Revolution, but another failure of the Australian stock market to back Australian manufacturing, and something of a disaster for many of the company’s shareholders.

Further reading:
Carbon Revolution to merge, to be US listed
Carbon Revolution produces wheels using Mega-line
Browse AuManufacturing’s coverage of Carbon Revolution here.

Picture: the bad news for Carbon Revolution’s Australian shareholders.

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