Relevant Documents:
Notice (Dec. 1)Notice (Nov. 30)Construction Update (Nov. 21)
PureCycle Ohio has reported delays of key items required to complete construction of its first commercial polypropylene purification plant in Ironton, Ohio. Nevertheless, the company says that it remains committed to completing the project in the first quarter of 2023 and has requested a call next week with bondholders.
According to a Wednesday, Nov. 30, notice posted to EMMA, Circular Polymers LLC declared a
force majeure event under its supply contract with PureCycle Ohio because the feedstock supplier lost its carpet subsidy determined by
CalRecycle and CARE (the so-called Carpet America Recovery Effort). As a result, Circular Polymers said the pricing mechanism in its contract with PureCycle “does not accurately reflect the market value of carpet feedstock prices, nor does it take into account inflation or increased transportation costs.”
According to a subsequent Thursday, Dec. 1, notice posted to EMMA, Purecycle said it “remains committed to reaching the milestones throughout the first quarter of 2023” but acknowledges it “has experienced various supply chain interruptions due to the COVID-19 pandemic and the ongoing Ukraine conflict.” Delivery of electrical components have been affected by the disruptions, which has delayed delivery of extruders, polyethylene byproduct parts, control systems, vessels and electrical distribution systems to the under-construction plant.
Despite these delays, PureCycle says that it has “diligently pursued” completion of the project on time by identifying alternative suppliers and negotiating with counterparties. It requests a call with bondholders during the week of Monday, Dec. 5, to discuss the status of the project and the “replacement of multiple Project Documents.”
According to the most recent construction update dated Nov. 21, the plant is on track to produce its final product by March 3, 2023. Total out-of-scope cost approved or pending change orders totaled $92.3 million as of Oct. 31. Contingencies will fund $21.1 million, $4.9 million will be funded by budgeted allowances and realized savings, with the remaining $66.3 million to be funded by parent PureCycle Technologies.