Loop Industries (NASDAQ:LOOP) used its fourth-quarter and full-year fiscal 2026 corporate update call to highlight progress on its planned commercial recycling facilities in India and Europe, while outlining cost reductions, financing activity and expected sources of future revenue.
President, CEO and Chairman Daniel Solomita said the company has been focused on “commercial execution, capital discipline” and preparing its proprietary PET and polyester recycling technology for broader deployment. The company did not provide a detailed financial results discussion on the call, but management emphasized project milestones and liquidity planning.
India Project CapEx Estimate Reduced
Solomita said the company’s Infinite Loop India joint venture has signed a memorandum of understanding with the government of Gujarat, which he said should support permitting, infrastructure coordination and administrative processes for the company’s first large-scale commercial manufacturing facility in the region.
The India facility remains expected to be operational in calendar 2028. Solomita said the estimated capital cost for the initial facility has been lowered to approximately $165 million to $170 million, down from a prior estimate of about $190 million.
He attributed the reduction to several factors, including favorable foreign exchange movements, lower land acquisition costs, purchasing optimization and engineering work. In response to an analyst question, Solomita said about half of the savings came from foreign exchange, while land acquisition savings totaled about $5 million.
Solomita said the revised capital estimate includes financing costs, land acquisition, engineering, construction and startup-related costs through commissioning. He said the construction portion alone is approximately $115 million.
Debt Financing Moves Into Technical Due Diligence
Loop said debt financing for the Indian facility is progressing, with several term sheets received from international banks. Solomita said the lenders are moving into technical due diligence, which will be conducted at Loop’s Terrebonne facility.
In the Q&A session, Solomita said the expected capital structure for the India project is 70% debt and 30% equity. Loop and its partner Ester Industries would each be responsible for 15% of the total project funding under that structure.
Solomita said the banks have selected an engineering firm for technical due diligence and that Loop is finalizing the scope of work. He said the company expects that process to be completed toward the end of June or mid-July.
He also said the debt financing is contingent on securing 50% of the facility’s offtake under minimum three-year contracts. The remainder of the facility’s expected production could be supported by letters of intent, according to Solomita.
Customer Contracts and Pricing Discussed
Solomita said Loop is in negotiations with several large consumer packaged goods companies and textile companies for additional offtake agreements and letters of intent. He said the company’s pricing has not been a sticking point with customers, citing the project economics in India and the quality of Loop’s recycled PET and polyester fiber.
Loop has already announced an offtake agreement with Nike. Asked about that contract, Solomita said it is a three-year fixed-price, fixed-volume agreement that is renewable after three years and includes a 40% take-or-pay provision. He said Nike does not have a right of first refusal on future capacity but does have an option to purchase additional material.
For beverage customers, Solomita said contracts are more commonly priced against an index, such as the ICIS recycled PET index in Europe, with a cap and collar structure. He said this provides downside protection for Loop and upside protection for customers.
Solomita also said PET prices are up 30% to 50% year to date, which he attributed mainly to higher oil prices. He said supply chain shocks, including those tied to conflict in Iran, reinforce the value of long-term fixed-price contracts for customers.
European Facility Advances in Germany
Loop also highlighted progress in Europe, where Infinite Loop Europe, its joint venture with Société Générale Group, has selected BASF Industriepark Lausitz in Schwarzheide, Germany, as the site for its first facility using Loop’s technology.
Solomita said the European project is moving into engineering and permitting. Loop’s engineering team is expected to provide a feasibility study and conduct supply chain testing at the Terrebonne facility. He said the feasibility study is expected to begin shortly, last approximately six months and generate “meaningful” revenue for Loop.
Solomita said engineering services revenue is already being generated from the Indian joint venture. He added that the European feasibility work could make engineering revenue and profitability more meaningful in the near term, potentially within weeks or months as contracts are finalized.
Beyond engineering services, Solomita said Loop expects additional milestone payments from Société Générale Group prior to construction under the licensing agreement.
Cost Cuts and Liquidity
Loop said it has initiated targeted expense reductions as it shifts resources away from technology development and toward commercial execution. Solomita cited streamlined headcount, a review of vendor contracts and service audits across fixed overhead areas, including insurance.
The company also said it is receiving advisory services and up to CAD 2.9 million in non-repayable funding from the National Research Council of Canada Industrial Research Assistance Program through its clean tech initiative. Solomita said the funding extends through October 2027 and supports operational readiness and industrial innovation without diluting shareholders.
Asked about liquidity, Solomita said Loop has enough liquidity through the end of the year. He said anticipated engineering contracts connected to pre-feasibility and feasibility work are expected to fund back-office spending for the next few years.
Looking beyond the initial India plant, Solomita said the joint venture plans to build a second, larger facility at the same site after the first plant achieves six months to one year of stable operations. He said the company has acquired enough land to support two facilities and that there is enough feedstock in Gujarat to support the second site.
Solomita said Loop would prioritize investing in lower-cost manufacturing regions such as India, while considering licensing in higher-cost manufacturing markets. For Germany, he said Loop expects to use modular construction, with modules built in India and shipped to the site for assembly, which he said could significantly reduce capital costs compared with a traditional stick-built approach in Germany.
About Loop Industries (NASDAQ:LOOP)
Loop Industries (NASDAQ:LOOP) is a technology innovator in the sustainable plastics sector. The company has developed a proprietary depolymerization process that breaks down end-of-life polyethylene terephthalate (PET) plastic and polyester fiber into their base molecules. These purified monomers are then repolymerized into virgin-quality PET resin suitable for new packaging applications, creating a closed-loop recycling solution that addresses global plastic waste challenges.
With its headquarters in Terrebonne, Quebec, Loop Industries operates pilot and demonstration facilities to validate and refine its technology.
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