Braidy Industries updates progress of $1.6B Eastern Kentucky aluminum mill and status of finance offering

With lightweighting vehicle and aerospace sectors committed to buy its entire output the next 7 years, commercial mill operation slated to begin in 2021

ASHLAND, Ky. — Braidy Industries reports having spent $15.7 million on the construction of its Braidy Atlas aluminum rolling mill in Greenup and tells federal financial oversight entities it remains on schedule to meet its anticipated target of bringing the mill to full commercial operation in 2021.

Braidy posted information on its Netcapital equity offering page on Nov. 12, Dec. 28 and Dec. 31 and is restricted under Securities and Exchange Commission rules from issuing public statements outside the update.

According to its posts, Braidy Industries Inc. is an Ashland-based company formed to lead a national transformation in the manufacture and use of efficient, eco-friendly metal alloys that are lighter and stronger than metals currently in commercial use.

Braidy is banking on its proprietary Veloxint alloy, designed by Massachusetts Institute of Technology scientists to use a nanocrystaline structure to create ultra-high strength metals suitable for extreme temperature uses that result in weight and cost savings needed by the automotive and aerospace industries. Braidy acquired Veloxint in the first quarter of 2018 and NanoAl, another leader in high strength aluminum alloys, in mid-2018.

Braidy currently anticipates mill construction will cost $1.68 billion, and is in the process of raising $500 million in equity capital and approximately $1.2 billion in debt capital. With unanimous legislative support, the Commonwealth of Kentucky is putting $15 million into the deal and provided significant economic incentives.

The company also received a favorable, fixed power rate from Kentucky Power, which is up to 50 percent lower than that paid by competitors. Braidy states on its Netcapital page that its mill will operate at the highest available level of efficiency and have low maintenance costs, no environmental or pension legacy costs, and little overhead.

It expects these factors will allow its Braidy Atlas facility to produce high quality aluminum sheet at roughly half the cost of most competitors in the United States, Europe and Asia, enabling it to enter the aluminum sheet market in 2021 as the lowest-cost producer by a wide margin and be able to offer an immediate price discount to customers; this is independently verified by CRU, a leading aluminum research firm, according to Braidy. Thus, demand has been strong prior to construction, and 200 percent of the mill’s capacity for seven years has been reserved under non-binding MOUs by top automotive OEMs.

Groundbreaking in Greenup took place in late May 2018. Braidy’s $15.7 million outlay so far includes purchasing land where the mill will be built; design and engineering plans; procurement of necessary permits and other governmental approvals; site preparation work and the June 2018 groundbreaking; negotiating engineering, procurement and construction (EPC) agreements; working with utilities to ensure the site will have the requisite electric, water and gas service once it is operational; and various professional services. Kentucky Power plans to perform $33 million in site preparation work in mid-2019, according to November news reports.

Braidy’s posts state it is raising equity through a traditional private placement targeted at large, sophisticated institutional investors (up to or more than $500 million) side by side with a smaller exempt “crowdfunding” offering under Section 4(a)(6) of the Securities Act of 1933, as provided under the JOBS Act, which allows “Main Street” investors to participate. Braidy seeks to meet the requirements for a potential direct listing on the Nasdaq in 2019.

As of Dec. 28, commitments via the Netcapital portal total 677,851 shares at $18.00 per share, for a total of $12.2 million; this includes 568 investors making commitments under the crowdfunding offering in the total amount of $735,282. The company expects the bulk of its current equity offering will be made through direct investments in Braidy, which are not part of share and dollar amounts of investments made through the Netcapital portal. Braidy said it is prevented from providing certain specific details regarding its offering, but can say it has in excess of $1 billion in substantial indications of interest from various accredited parties, and along with its stakeholders, is satisfied in the progress of the offering and the amount of equity commitments to date.

Management is in discussions with a number of potential strategic investors who are attracted to Braidy’s plans to construct the Braidy Atlas aluminum rolling mill in the EastPark Industrial Center near Ashland and the commercialization of the Veloxint technology. As those discussions continue, Braidy announced it is extending the equity offering window in respect of its crowdfunding and Regulation D offerings to March 31, 2019.

Braidy Industries will generate revenue by selling Veloxint parts, Veloxint powder and aluminum sheet from Braidy Atlas, the company states, and expects to sell aluminum sheet to the automotive industry; to sell metal injection-molded parts to tool companies, aircraft manufacturers, auto companies, military, and space exploration partners; and to sell powder for 3D printing to military and aerospace companies.

More than 7,000 have applied for Braidy’s expected 600 full-time jobs, according to the company.

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