Clean Power Hydrogen (AIM:CPH2) has executed a binding term sheet with Irish green hydrogen developer Hidrigin, converting a £750,000 interim payment already held by CPH2 into a convertible loan note and launching a nine-month exclusivity period to negotiate a full strategic partnership and manufacturing agreement.
The convertible loan note, secured by a first-ranking floating charge over CPH2's assets, arises from an existing milestone payment under an MFE220 electrolyser sales contract with Hidrigin, meaning no new cash changes hands at signing.
Under the proposed strategic partnership, Hidrigin, which plans to develop sustainable aviation fuel production facilities across Europe and North America, beginning with a flagship site in Lisheen, County Tipperary, would become CPH2's exclusive manufacturing partner across the UK, Ireland, the United States, Canada and Mexico, with actual production outsourced to engineering contractor Jones Engineering Manufacturing Limited.
Any intellectual property improvements to CPH2's electrolyser design developed through the arrangement would be jointly owned by both parties.
CPH2's CEO-elect Richard Scott said the partnership would bring its "low-cost modular solution to market" across five territories, while Hidrigin's CEO Eric Whelan acknowledged a recent final-testing failure but said the company "continues to believe in the global potential for this new category of electrolyser."
The term sheet has a longstop date of 31 July, with definitive documentation required within 28 days of signing, though completion is not guaranteed.
