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AMCI Acquisition Corp. II (AMCI) Adds FPA to LanzaTech Deal

AMCI Acquisition Corp. II (AMCI) Adds FPA to LanzaTech Deal

AMCI Acquisition Corp. II (NASDAQ:AMCI) announced in an 8-K this morning that it has signed a new forward purchase agreement (FPA) covering up to two-thirds of its outstanding public shares.

The agreement comes in the form of an over-the-counter equity prepaid forward transaction, under which the investor, ACM ARRT H, will purchase up to 10,000,000 shares previously tendered for redemption before close. The investor has agreed not to redeem them and will receive compensation over time.

Once the deal has closed, AMCI II will pay the investor the equivalent of the redemption price for these shares minus up to $2.5 million, which is to remain in the trust account. If this is not repaid within 30 days of close, this shortfall will be considered to be $7.5 million.

The investor has agreed not to sell any shares on the open market at a price below $10 per share during the 30 days following close and the combined company will not issue new shares or agree to any equity-linked financing until this shortfall is met. The investor may meanwhile request warrants from the combined company equal to the difference between 10,000,000 and the number of shares it ultimately purchases plus any shortfall amounts.

This agreement is to mature on the three-year anniversary of close, at which time the combined company is to pay the investor the lesser of the maximum number of shares or 7,500,000 times $2, or $3.25 if the shortfall was not repaid in full within 30 days of close. This compensation may come in the form of cash or shares, and the combined company must also pay the investor for the equivalent of 500,000 shares at the redemption price at this time.

The maturity date may be moved up if company shares are trading with a VWAP below $3 for 20 of 30 days within the first 90 days of the agreement or $6 thereafter. If AMCI II has fully repaid the initial shortfall, then the maturity may only be accelerated if shares drop below $2 for 50 of 60 trading days within 90 days of close or $3 thereafter.

This agreement comes as AMCI II has adjourned its completion vote for LanzaTech twice in the past week, but that special meeting is now on once again for 3 om ET today, February 6.

The 8-K updated that the SPAC has currently has $152,360,374 in its trust account and it supplemented this at announcement with a $125 million PIPE at $10 per share. AMCI later secured an additional $50 million PIPE from Woodside Energy (ASX:WDS) as part of an effort to fully cover the transaction’s $230 million minimum cash condition.

Additionally, LanzaTech was able to secure a $500 million partnership with Brookfield Renewable to co-develop and build new commercial-scale production plants that will utilize the company’s technology. Following the initial investment, Brookfield disclosed that it could commit to making an additional $500 million available if sufficient projects are available at the agreed milestones.

AMCI inked its $1.8 billion deal with LanzaTech in March 2022. The Chicago-based company is developing carbon-capture plants designed to provide a number of carbon negative outputs ranging from jet fuel to consumer packaging materials.

In December, it announced it had received a £25 million ($31 million) grant from the UK Department for Transport to further develop Project DRAGON, its sustainable aviation fuel initiative.