We argue that the establishment of the JV with Antin and Michelin verifies Enviro’s investment case and provides an attractive framework for reaching up to 1m tons in ELT capacity by 2030, as we argue Enviro’s coming equity investments should be greatly reduced relative to what we expected before. Furthermore, the JV aligns all stakeholders' interests and incentivizes them to succeed.

We find it very positive that Antin will designate its own management team in the JV and that Enviro will be reimbursed for all its previous work and future works regarding the Uddevalla plant and other plants included in the JV. This further reduces the financial risk in Enviro. However, we believe a directed share issue of up to SEK300m will take place in the coming quarters to finance the first plant (Uddevalla) and to receive 30% ownership in the JV.

We have reviewed our estimates following the JV announcement, primarily with regards to prices per ton, the roll-out of plant capacity, and awaiting capital requirements, where we expect a directed share issue of up to SEK300m to take place in the coming quarters. Our assumptions for this expected share issue include the issuance of 150m shares, at the price of SEK2.0 per share (19% dilution). All in all, this results in an increased fair value range of SEK2.1 (1.1) – SEK11.0 (9.6) per share, with a base case of SEK6.1 (4.1) per share.