Spinnova has signed a binding 1.5-million-euro ($1.7 million) loan agreement to provide bridge financing to Portuguese yarn spinner Tearfil, the development partner it is moving to acquire.

The agreement, announced Sept. 30, formalizes financing outlined on Sept. 17, when Spinnova disclosed a nonbinding letter of intent to acquire all of Tearfil's shares. The company said the signed loan retains the key terms previously announced.

The money will cover Tearfil's operating costs while the mill works through a debt restructuring. Tearfil is using PER, a Portuguese court process that allows a company to negotiate with creditors without suspending operations — a detail that matters for any brand or mill currently relying on Tearfil's yarn capacity, since production continues during the proceedings.

Spinnova has set an initial purchase valuation of 500,000 euros (about $567,000), payable in cash and Spinnova shares. The companies target completion in the first quarter of 2027, subject to due diligence, Spinnova board approval, final approval of Tearfil's restructuring plan and definitive agreements. The loan terms, set in September, require repayment one year after disbursement, with interest at the 12-month Euribor rate plus 2 percentage points. Provisions could force earlier repayment if Spinnova walks away from the purchase.

For Spinnova, Tearfil is more than a distressed supplier. The two companies signed a yarn development agreement in June 2023, selecting Tearfil's Guimarães mill as the site for Spinnova's research and development yarn-spinning line. Spinnova had originally planned to install the line in Jyväskylä, Finland. Relocating it to Portugal gave the fiber developer access to Tearfil's spinning expertise and the surrounding textile industry cluster, while cutting expected capital and operating costs. Tearfil operates the equipment; Spinnova uses part of the capacity for product development.

Rieter supplied the machinery for the line, inaugurated in May 2024. The setup lets the partners test Spinnova fiber and develop yarns for different textile applications — work aimed at helping manufacturers process the material at commercial scale.

"Tearfil has been an important partner for Spinnova, playing a key role in advancing Spinnova fiber toward commercial applications," Janne Poranen, CEO of Spinnova, said in the Sept. 17 statement. "Bringing these capabilities into Spinnova would strengthen our ability to support broader adoption of Spinnova fiber and advance the commercial scaling of our technology."

The relationship has since deepened. In January 2026, the partners signed another nonbinding letter of intent, this time for Tearfil to secure fiber volumes from Spinnova. Tearfil, which has operated since 1973, said it would bring yarn blends containing the fiber to the European market.

Spinnova is also broadening its feedstock base. In August 2023, Business Finland awarded it a grant of up to 1.9 million euros (about $2.2 million) to develop pilot-scale production using textile and agricultural waste. That work included a refining setup for processing waste and recycling Spinnova's own fiber.

The Tearfil financing comes as Spinnova pushes toward the U.S. public markets. At an extraordinary general meeting on Sept. 28, shareholders approved a U.S. initial public offering and a dual listing on the Nasdaq Capital Market. They also authorized the board to issue up to 45.9 million shares in connection with the listing — approximately 87.7 percent of the company's existing share count as of the meeting notice issued Sept. 4.

That authorization runs through Feb. 28, 2027. It gives the board authority to set the offering's terms; it does not mean the shares have been issued. Spinnova said Sept. 22 that it expects to complete the dual listing in the fourth quarter of 2026, subject to Nasdaq approval, applicable listing requirements and market conditions. Its shares will continue trading on Nasdaq First North Growth Market Finland regardless of whether the U.S. listing proceeds.

If both transactions close on schedule, Spinnova would enter 2027 with integrated spinning capacity in Portugal, a Nasdaq Capital Market listing and a clearer route to commercial-scale volumes of its fiber for European yarn buyers.