Swedish green steel startup Stegra today said it would need extra capital to finish construction of a giant green steel plant, as it appointed an executive with a key investor as its new CEO.
Stegra said additional capital will be needed for Europe's first hydrogen-fuelled steel plant, located in Boden, Sweden, as the estimated costs of completing it are “significantly higher” than expected in June this year, following a review involving external advisors.
It said the cost increases are mainly due to substantial ramp-up costs following the prolonged scaling back of work earlier this year, as well as inflation.
According to sources cited by the publication Affärsvärlden, at least SEK 10 billion, around €880m, is needed to complete the plant. Stegra declined to comment.
Leif Johansson, Stegra chair, said: "The financing need is greater than we had hoped, but we have a robust plan to complete the project and have identified greater opportunities for outsourcing and partnerships than we previously thought.
“If anything, our belief in Stegra and in the business opportunities once the steel plant is complete is stronger today than when we came on board in June, and we are now working constructively with all of the company’s stakeholders to find a solution to the financing need.”
In April, Stegra secured €1.4bn in rescue funding from a consortium led by the prominent Swedish Wallenberg family for the project.
The consortium also includes Temasek and IMAS, with the consortium taking “a leading position in Stegra". It was also supported by Stegra’s existing shareholders, including Altor, as well as Hy24 and Just Climate.
Stegra today said its largest shareholders have “expressed a positive view on taking part in the work to secure the capital required to complete the project”.
The board has also appointed former Saab CEO Håkan Buskhe as its new CEO, replacing Henrik Henriksson. Buskhe, who is head of special investments at Wallenberg Investments and a Stegra board member, was CEO and president of Saab between 2010 and 2019.
Would you like to write the first comment?
Login to post comments