ITM Power has announced a non-binding Heads of Terms agreement for the sale of its Motive Fuels as it shifts investment to electrolyser business. The company announced a a review of strategic options for an exit from Motive Fuels Ltd in January this year. The transaction is expected to be completed by the end of 2023.
Andy Allen, CFO ITM Power, said: “The sale of Motive will allow us to devote our time, attention and capital resources on our core competencies, to ready the business for scaling up to capture the significant growth opportunities that lie ahead of us. Motive has been an important part of ITM’s journey, and it is important to us that the business will be left in capable and ambitious hands.”
The company now has just two stations, in Rotherham and Birmingham, having announced the closure of two stations in Teddington and Rainham in May this year. The company said of the closures: “We are focusing on large vehicle refuelling and the closure of these sites is a reflection of their small footprints from them being the first of a kind and prototypes which we have learned from allowing us to improve our future network.”
It promised to develop “new sites for large vehicles where we anticipate greater benefit from hydrogen”.
ITM Motive was launched as a wholly-owned subsidiary of ITM Power in November 2021. At that time it was said to own and operate eight hydrogen refuelling stations, with a further four in build or funded. It had a total hydrogen generation capacity of 3.1 tonnes per day and a dispensing capacity of 7.8 tonnes per day.
In March 2022 it became a 50/50 joint-venture owned by ITM Power and Vitol, with the two companies each promising investment of up to £30 million. At that time the companies said, “Both ITM Power and Vitol believe the market for Hydrogen in Transport is on the cusp of rapid expansion, supported by government incentives to accelerate transportation decarbonisation. This partnership will help facilitate the rapid scaling up of production, distribution and demand stimulation for Hydrogen to Transportation. Vitol is aligned with Motive’s strategy to target building large refuelling stations for heavy duty vehicles, such as trucks and buses. Over the past 18 months, Motive has been working to develop deep relationships with a small number of blue-chip heavy goods users in the UK and aims to develop standard 4 MW sites around the UK.”
Allen said the Joint Venture was established to develop with the vision of building a significant UK refuelling business. However, at ITM Power “one of the three priorities of our 12-month plan is increased cost and capital discipline. The planned transaction will allow ITM to redirect £28 million of pre-committed cash to our core business, and to focus on becoming a volume manufacturer of state-of-the-art electrolysers.”