IPO Watch: Lithium sulphur battery developer Li-S Energy is coming to the ASX

Many battery tech ASX companies specialise in lithium-ion batteries but aspiring listee Li-S Energy (ASX:LIS) specialises in lithium sulphur batteries.

The company is pencilled in to open its offer today (Wednesday August 4) and then list on August 30.

It is raising $34 million at 85 cents per share in a deal led by Blue Ocean Equities.

Lithium sulphur batteries

Lithium sulphur batteries have long offered promise to perform even better than lithium-ion batteries – with potential to offer phones with one-week batteries, electric cars that could go for 1,000km and drones that fly for several hours.

Until recently lithium sulphur batteries haven’t been viable because the high performance was cancelled out by effects of significant degradation to the batteries, caused by that higher performance.

But Li-S Energy’s technology, which was developed at Deakin University, solves this problem by integrating a nano-material called Boron Nitride Nanotubes (BNNT).

BNNTs have historically been expensive to make, requiring 5000C temperatures and therefore costing nearly $1 million a kilogram to be produced.

Yet, Li-S Energy can create BNNT fibres at 1,350C which uses less energy and is faster.

“We created a lithium sulphur battery with all the benefits of lithium sulphur but a life cycle equivalent to consumer grade lithium-ion batteries – that’s the change we’ve been able to bring forward,” CEO Lee Finniear said speaking with Stockhead.

The EV race is heating up

Dr Finniear says while COVID-19 caused some difficulties, particularly with the lengthy lockdown in Geelong (where Deakin’s research team is) it had a silver line in accelerating the push to electric vehicles, which will be the major use of lithium sulphur batteries.

“What we’re seeing is a race for different companies, different battery technologies to be able to play a big role in the future electrification, particularly when it comes to EVs,” he said.

“It [COVID] has given everyone around the world pause for thought and in the battery industry, particularly in the EV industry, it’s given that breathing space to allow those companies to recongise how significant the change is going to be.

“The EU recently legislated that no new cars will be able to be sold with a petrol or diesel engine after 2035 – that’s only 14 years away.

“So as demand picks back up we’re getting inquiries about our batteries from major organisations around the world which is excellent.”

Why is Li-S Energy listing?

Being 48% owned by ASX-listed PPK Group (ASX:PPK) and having Deakin University as a joint venture partner, you’d be forgiven for wondering why Li-S Energy would chose to list.

Dr Finniear gave three reasons.

“First it’s valuation, it allows us to more accurately present the value of the company on the market when we compare it to the other battery companies – QuantumScape (NYSE:QS) has $9.5 billion valuation at a similar stage to us,” he said.

“Second is recognition, being able to get our message to the wider world. One of the key things we’re doing now is developing collaborations with business partners, particularly in the product area, to put our batteries into their products.

“And the third is to provide the opportunity for the Australian market to benefit at a relatively early stage in our journey to commercialisation and form a significant part of the future of batteries.”