£1.3m Carbon Order Fund and $2m dollar investment

In a series of complex back-to-back transactions, we acted for the general partner of Carbon Order 1 LP (an existing UK fund of ~£1m) in a reorganisation and the general partner of Carbon Order 2 LP (a new £1.3m private fund limited partnership) in its creation, as well as the latter's CAN$2m investment in Canadian limited company, Carbon Engineering.

Both Carbon Order funds are collective investment schemes which offered UK investors an exclusive opportunity to take up convertible loan notes in Carbon Engineering, a Canadian company which has developed technology to capture CO₂ directly from the atmosphere and synthesize it into clean transportation fuels using inputs of only air, water, and renewable power with the aim of providing global-scale quantities of clean synthetic fuels. 

Carbon Engineering announced yesterday that “it had raised gross proceeds of CAD $11 million in its recently closed convertible loan bridge financing round. This investment provides the funding for Carbon Engineering to expand its existing pilot plant and design its first commercial AIR TO FUELS™ plant, which will be the first in the world to commercially sell transportation fuels synthesized from air and clean electricity. This financing was concluded in anticipation of an equity financing, which is hoped to be completed as soon as possible.” 

Dona Ardeman, Principal Associate for Mills & Reeve said: “it has come with a real sense of satisfaction to have been able to deliver for the client on what was, in the circumstances, a very time-restricted matter combined with various cross-border sensitivities.” 

Martin Rigby, Managing Director of ET Capital, a UK FCA-authorised fund manager and the fund manager for the Carbon Order funds, said: “we are thrilled to be supporting the Carbon Order team in structuring and managing an investment in one of the most exciting and potentially significant global low carbon businesses.” 

Nigel Tuersley, founder of Carbon Order, commented “Carbon Engineering’s Direct Air Capture system is a strategically significant technology with vast potential in the two critical areas of climate change mitigation: decarbonisation and atmospheric CO₂ reduction (CDR). We are delighted to have contributed to the current funding round for the company at this exciting time in its commercialisation”.

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