SGL Carbon - Unexpected Resources
All,
Please find our unchanged analysis on SGL here.
The research grant should support SGL’s FCF going forward. As with most research grants, this will flow over time instead of through a one-off upfront payment. The total amount is significant in the context of SGL, representing about 30% of 2021E EBITDA. Therefore, it should help deleverage the balance sheet over time, although some if it may be tied to additional R&D spending which is not currently factored in. It should also have a positive impact on liquidity, over time, although we do not see this as a major pressing issue for SGL.
SGL Carbon announced overnight that it is receiving EUR42.9m in a research grant under the European IPCEI (Important Project of Common European Interest) / EUBatIn (European Battery Innovation) program. The funding will be used to develop carbon materials for an European centred lithium-ion battery value chain.
Juliano
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