Danny Rice-led Merger Adds SK Group as JV Partner

NET Power and Rice Acquisition Corp. (RONI) announced on May 19 a joint venture (JV) with SK Group to pursue the origination and development of utility-scale power plants across Asia.

NET Power also announced SK Group had committed $50 million in PIPE financing for NET Power and RONI's proposed $1.5 billion business combination. A PIPE, or private investment in public equity, is a funding mechanism that allows investors to buy stock directly from a company at a reduced price.

The South Korean conglomerate joins Occidental Petroleum and other investors to bring the proposed business combination with RONI to total committed capital of $540 million. RONI is led by Daniel Rice IV and Kyle Derham, former executives of Rice Energy Inc. and Rice Midstream Partners.

The proposed NET Power-SK JV would utilize NET Power's patented oxy-combustion supercritical CO2 power cycle with SK's regional footprint and project development expertise to deploy clean, reliable and low-cost power across key Asian markets, according to a May 19 NET Power press release.

Project origination and development work are expected to include activities such as site selection, supply and offtake contracting, financing and permitting.

NET Power and SK will each hold 50% stake in the common equity of the NET Power-SK JV, which is subject to negotiation and execution of definitive documentation.

Danny Rice, the incoming CEO of NET Power, said the JV will help to decarbonize Asian power generation, which is critical to achieving global emissions goals.

"Asian power generation, which is primarily fueled by coal, accounts for nearly 25% of global emissions," he said. "We believe that NET Power possesses the most cost-effective technology for decarbonizing fossil fuel-based power generation, and we are thrilled to partner with SK to deploy our NET Power plants on a large scale throughout Asia."

SK Inc. Materials President Young-wook Lee said NET Power’s technology will help the company fulfill its pledge to achieve net-zero carbon across its business by 2050.

“Deploying NET Power plants throughout Asia is an important step forward in decarbonizing the region and ending a prevailing dependence on high-carbon intensity baseload power generation," said Lee.

SK brings the expected investment in NET Power to $895 million, consisting of approximately $345 million from RONI's trust account, approximately $540 million from the PIPE raised entirely at $10/share of common stock. An additional $10 million of interim financing came from an existing owner of NET Power to support its operations through the closing of the combination.

Assuming no RONI shareholders exercise their redemption rights, the combined company is expected to have a market capitalization in excess of $2 billion.