A new fund launched in November by the Business Development Bank of Canada to help foster the growth of homegrown climate technology has made its largest investment yet.
The Crown corporation’s investment arm, BDC Capital, along with Vancouver-based Evok Innovations, recently co-led a Series A2 financing round that raised US$50 million in investment capital for Summit Nanotech, a Calgary-based lithium technology company.
The company, which has developed a proprietary lithium extraction technology it says uses less water and chemicals and produces fewer emissions than traditional extraction methods, currently operates a multi-client pilot project in Chile and is working toward commercialization.
While BDC did not disclose the exact amount it invested itself (the total US$50 million raised by Summit Nanotech included other investors, including Xora Innovation and Capricorn Investment Group, as well as a consortium of climate-focused funds), it confirmed its investment was the largest yet from its $400-million Climate Tech Fund II.
The fund, announced in November 2022, aims to address the lack of risk capital for the commercialization and scale-up of Canada’s clean-tech and climate-tech industry.
It follows up where BDC’s first $600-million climate tech fund, which was launched in 2018 and is now fully committed, left off by seeking investments in technologies that will help Canada reach its goal of achieving net-zero greenhouse gas emissions by 2030.
Those technologies include things like lithium — a key component in the manufacturing of electric vehicle batteries — as well as other promising technologies such as hydrogen, carbon capture and storage, low-carbon concrete and more.
Cheri Corbett, senior partner with BDC Capital’s Climate Tech Fund, said only five per cent of venture capital investment in Canada in 2021 went into climate-related technology and clean tech. That’s compared with 14 per cent of venture capital investment globally.
BDC’s Climate Tech Fund was meant to help bridge that gap by supporting the longer development timeframes and larger capital needs typical of many climate tech ventures, she said.
“Most of these technologies, and the ones we focus on in particular, are hard tech/deep tech opportunities. So as a function of that, they take more money, and they take longer,” Corbett said.
“We’ve created a fund that can really dig in, invest in these companies early and really follow through, and not all funds are built that way.”
BDC also aims to help prevent Canadian entrepreneurs from needing to move to the U.S. or another jurisdiction in order to scale up their technologies. Summit Nanotech CEO Amanda Hall said the investment from BDC allowed her company to retain its status as a Canadian-controlled company, since much of the company’s prior investment capital came from clean tech-savvy investors in Singapore, the U.S. and Australia.
“Ninety per cent of our employees are Canadian, our manufacturing is done in Canada, the technology is Canadian — so we wanted that Canadian recognition,” Hall said.
A report released Tuesday by Deloitte said there are roughly 1,100 clean technology, or clean tech, companies across Canada today. These companies represent approximately 3.1 per cent of GDP, according to Deloitte, and more than 210,000 jobs.
The Deloitte report said venture capital funding for clean tech in Canada grew to US$342 million in the second quarter of 2022, up 21.6 per cent from the first quarter and a 223 per cent increase year-over-year.
But the report also said that private-sector investment in research and development as well as technology adoption in Canada remain well below the global average
The Deloitte report said that if Canada is to meet its climate targets, it must do better at transitioning promising startups within the sector into an industrial base of companies that can become globally competitive, dominant players.
“Decarbonization becomes more expensive the longer action is delayed,” the Deloitte report stated.
Zacks Investment Ideas feature highlights: Alphabet, Tesla, Shopify, Amazon and Palo Alto
For Immediate Release
Chicago, IL – February 2, 2023 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Tesla TSLA, Shopify SHOP, Amazon AMZN and Palo Alto Networks PANW.
Which of These Stocks Has Been the Best Buy, Post-Split?
Stock splits have been a regular occurrence in the market over the last several years, with many companies aiming to boost liquidity within shares and knock down barriers for potential investors.
Of course, it’s important to remember that a split doesn’t directly impact a company’s financial standing or performance.
In 2022, several companies performed splits, including Alphabet, Tesla, Shopify, Amazon and Palo Alto Networks. Below is a chart illustrating the performance of all five stocks over the last year, with the S&P 500 blended in as a benchmark.
As we can see, PANW shares have been the best performers over the last year, the only to outperform the general market.
However, which has turned in a better performance post-split? Let’s take a closer look.
We’re all familiar with Tesla, which has revolutionized the EV (electric vehicle) industry. It’s been one of the best-performing stocks over the last decade, quickly becoming a favorite among investors.
Earlier in June of 2022, the mega-popular EV manufacturer announced that its board approved a three-for-one stock split; shares began trading on a split-adjusted basis on August 25th, 2022.
Since the split, Tesla shares have lost roughly 40% in value, widely underperforming relative to the S&P 500.
Palo Alto Networks
Palo Alto Networks offers network security solutions to enterprises, service providers, and government entities worldwide.
PANW’s three-for-one stock split in mid-September seemingly flew under the radar. The company’s shares started trading on a split-adjusted basis on September 14th, 2022.
Following the split, PANW shares have struggled to gain traction, down roughly 15% compared to the S&P 500’s 3.3% gain.
Shopify provides a multi-tenant, cloud-based, multi-channel e-commerce platform for small and medium-sized businesses.
SHOP shares started trading on a split-adjusted basis on June 29th, 2022; the company performed a 10-for-1 split.
Impressively, Shopify shares have soared for a 50% gain since the split, crushing the general market’s performance.
Alphabet has evolved from primarily being a search engine into a company with operations in cloud computing, ad-based video and music streaming, autonomous vehicles, and more.
Last February, the tech titan announced a 20-for-1 split, and investors cheered on the news – GOOGL shares climbed 7% the day following the announcement. Shares started trading on a split-adjusted basis on July 18th, 2022.
Alphabet shares have sailed through challenging waters since the split, down 10% and lagging behind the S&P 500.
Amazon has evolved into an e-commerce giant with global operations. The company also enjoys a dominant position within the cloud computing space with its Amazon Web Services (AWS) operations.
AMZN’s 20-for-1 split was a bit of a surprise, as it was the company’s first split since 1999. Shares started trading on a split-adjusted basis on June 6th, 2022.
Following the split, Amazon shares have lost roughly 18% in value, well off the general market’s performance.
Stock splits are typically exciting announcements that investors can receive, with companies aiming to boost liquidity within shares.
Interestingly enough, only Shopify shares reside in the green post-split of the five listed.
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$13 million investment in Campbellford Memorial Hospital
The Campbellford Memorial Hospital will be receiving a $13 million investment from the Ontario Government to address infrastructure concerns.
The announcement was made at the hospital by Northumberland—Peterborough South MPP David Piccini.
The $13 million is broken down as follows:
- $9,639,900 will be going to CMH as one-time capital funding to address the HVAC and generator
- $1,874,929 for reimbursement of CMH’s COVID-19-related capital expenses
- $771,797 in COVID-19 incremental operating funding
- up to $600,000 in one-time funding to support the hospital’s in-year financial and operating pressures
- $163,600 in pandemic prevention and containment funding
- $81,132 through the Health Infrastructure Renewal Fund
- $46,884 in health human resources funding.
Interim President and CEO Eric Hanna welcomed the news, saying much needs to be done about the HVAC and generator.
At the announcement, Hanna spoke of the issues with the generator.
“I’ve got the wee little generator up at the lake and then I’m thinking well, everything should be going well at the hospital,” Hanna told the audience in attendance.
“You get a call from the person in charge who says, ‘Guess what Eric? Generator didn’t start. Oh, so what does that mean? There’s no power in the hospital.’ That’s happened a couple of times in the past year and the generator is over 30 years old.”
Hanna says the solution was not as easy as replacing the generator.
“You can go buy the generator and that may be about a million dollars. But then when we found out afterwards, we came to hook up the new generator to the electrical distribution system and said it won’t work with that because your electrical distribution system is 1956. You can’t plug this generator into that. So now we’re putting close to $5 million into a whole electrical distribution system so the generator will work. It’s part of that ongoing thing and that’s why these costs continue to go up.”
The HVAC system was also something addressed by Hanna.
“It’s a contract close to $7 million to replace that. This wing, for example. There’s no fresh air in this wing. It hasn’t worked in here for 15 years. So now this is administrative areas and the concern was that in some of the patient carriers, it wasn’t working either. So – having those discussions with David (Piccini) and saying what we have to do to correct this.”
Chile’s Enap Set to Slash Debt Burden That Weighed on Investment
(Bloomberg) — Enap, Chile’s state oil and gas company, plans to use near-record earnings to slash its debt burden, while increasing investment in its refineries and in exploration and production.
The company aims to reduce its debt load to about $3 billion “medium term” from the current $4.3 billion, Chief Executive Officer Julio Friedmann said in an interview. Plans include a bond sale in the first half of this year to refinance some securities.
The improved financial position — with 2022 profit surging to $575 million — comes after Enap’s oil and gas operations in Egypt, Ecuador and Argentina got a boost from high crude prices, while healthy international refining margins benefited plants in Chile. Those trends are expected to extend into this year and next, enabling the company to pre-pay some short-term obligations. About half of the current debt burden matures in the next three years.
“We are going to issue bonds,” the MIT-trained executive said Wednesday from the Aconcagua refinery in central Chile. “We are closely evaluating the local and international markets.”
At the same time, Friedmann, who took the reins at Enap in November, plans to increase capital expenditure to about $700 million this year from $550 million last year.
The increase comes after underinvestment in the past few years because of Covid restrictions and the heavy debt load. Spending will focus on making treatment processes cleaner and upgrading infrastructure, as well as a more aggressive approach to increasing gas reserves in the far south of the country, he said.
Enap plans to expand in both liquefied petroleum gas and natural gas markets in Chile, focusing on the wholesale business and eventually selling directly to large-scale consumers such as mines. Organizational changes to enable the expansion will be announced soon. There are no plans to enter the final distribution business, Friedmann said. The company wants to supply more gas to southern cities as a way of replacing dirtier fuels such as wood and diesel.
Enap and its partners are also preparing pipelines and a refinery near Concepcion to start receiving crude from Argentina’s Neuquen basin sometime this year in an arrangement that could supply as much as 30% of its needs.
While there’s plenty of potential do collaborate more with energy-rich Argentina, particularly in the Magallanes area, that would require greater long-term visibility on supplies from the neighboring country, Friedmann said.
He sees a role for Enap in the development of green hydrogen in Chile. It’s in talks with three companies to enable its facilities in Magallanes to be used to receive all the wind turbines, electrolyzers and other equipment that will be needed to make the clean fuel. Enap is also evaluating its own small pilot plants and will consider whether to take up options to enter other green hydrogen projects as an equity partner.
While the company will maintain its focus on meeting rising demand for traditional fuels, it anticipates new regulation that will require lower emissions. It’s also looking closely at clean-fuel options for aviation, Friedmann said.
(Adds clean fuel plans in last paragraph. I previous version corrected spelling of CEO’s surname.)
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