TIDMGHE
Gresham House PLC
17 October 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT
This announcement is an advertisement for the purposes of the
Prospectus Rules of the UK Financial Conduct Authority ("FCA") and
not a prospectus and not an offer of securities for sale in any
jurisdiction, including in or into or from the United States,
Australia, Canada, Japan or South Africa. Neither this announcement
nor anything contained herein shall form the basis of, or be relied
upon in connection with, any offer or commitment whatsoever in any
jurisdiction. Investors should not purchase or subscribe for any
transferable securities referred to in this announcement except on
the basis of information in the prospectus in its final form (the
"Prospectus") expected to be published by Gresham House Energy
Storage Fund Plc (the "Company") prior to Admission (as defined
below). A copy of the Prospectus will, following its publication,
be available on the Company's website at
newenergy.greshamhouse.com/esfplc, subject to applicable securities
laws and will be available for inspection at the Company's
registered office at 7th Floor, 9 Berkeley Street, London W1J 8DW.
The Prospectus will also be available on the National Storage
Mechanism at www.morningstar.co.uk/nsm.
Gresham House Energy Storage Fund Plc (the "Company")
Publication of Prospectus
Gresham House Energy Storage Fund plc (LSE: GRID) is pleased to
announce the publication of a Prospectus relating to its intention
to float with a target to raise gross proceeds of up to GBP200
million from the IPO and the subsequent placing programme.
The Company will invest in utility-scale Energy Storage Systems
("ESS") in Great Britain that provide services to the National Grid
to support grid stability as well as delivering the essential
infrastructure required to enable Great Britain's increasing
reliance on intermittent sources of renewable energy such as wind
and solar.
The Company will offer investors the benefit of an attractive
and sustainable yield of 7.0% with potential for capital growth*.
The Company also offers infrastructure investors a useful source of
diversified income with a robust income stream not dependent on
renewable subsidies.
The IPO and admission to trading on the Main Market of the
London Stock Exchange, within the Specialist Fund Segment
("Admission"), is expected to become effective on 5 November
2018.
The Company is a newly incorporated closed-ended investment
company and registered as an investment company under Section 833
of the Companies Act 2006. The Company intends to operate as an
investment trust within the meaning of Chapter 4 of Part 24 of the
Corporation Tax Act 2010.
The Prospectus has been approved by the UK Listing Authority and
a copy will shortly be available on the Company's website:
newenergy.greshamhouse.com/esfplc, and at the Company's registered
office: 7th Floor, 9 Berkeley Street, London W1J 8DW. A copy of the
Prospectus has been submitted to the National Storage Mechanism and
will be available shortly for inspection at
www.morningstar.co.uk/uk/NSM.
Key highlights
-- Compelling investment opportunity in fast growing sector.
Battery-based energy storage provides access to multiple revenue
streams that are not dependent on renewable subsidies and are
uncorrelated with the absolute level of power prices, with a
combination of short and longer-term revenue streams for each
asset. The intermittent nature of renewable energy places pressure
on the National Grid to match supply and demand on a real-time
basis, particularly as traditional coal and gas-fired generation is
being withdrawn. ESS solve this problem by providing services to
the National Grid to maintain grid stability as ESS can absorb as
well as release energy as required in real time;
-- Attractive and sustainable dividend with potential for
capital growth. Target dividend payment of 7.0p (4.5p in first
year);*
-- Target NAV total return of 8.0% p.a.* Once gross proceeds
have been fully deployed, the manager expects to introduce leverage
up to a maximum of 50%. Gearing, coupled with the expected asset
management and revenue improvements, should increase the NAV total
return target to 15.0% p.a.;**
-- Identified seed portfolio and pipeline. Proceeds from the IPO
are contracted to be deployed in a seed portfolio comprising 70MW
across five fully operational sites, from the date of admission to
trading. Furthermore, the Company will have exclusivity over an
additional 132MW ready to build projects. A further pipeline
project of 80MW is currently in an advanced stage of negotiation,
and an additional pipeline of >50MW, giving the ability to
deploy 200MW+ within 12 months of IPO;***
-- Seed Portfolio Aggregate Project Value of GBP57.22 million,
not taking into account any debt owed, working capital balances or
cash held by any of the Seed Project Companies, comprising
acquisition consideration for each of the Seed Project
Companies.
-- Effective structure with long-term, viable approach to
fundraising. London Stock Exchange (LSE) traded closed-end fund
targeting gross proceeds of up to GBP200 million from the IPO and
the subsequent placing programme;
-- An experienced independent board has been established under
the Chairmanship of John Leggate CBE, FREng, an energy sector
expert;
-- Cornerstone investment of more than GBP30 million. The
Company has secured commitments from members of the Gresham House
management team, funds under management by the Gresham House Group
and certain members of Noriker. These investors have agreed to
commit in aggregate approximately GBP33.5 million, which would
comprise, in aggregate, approximately 16.75 per cent. of Ordinary
Shares issued by the Company on first Admission, assuming that
GBP200 million are raised.
-- Investment manager with proven expertise in developing and
operating ESS. Gresham House New Energy has an experienced
management team who have worked together for over 10 years, with
strong renewable and energy storage experience. To date, the team
has successfully worked on 28 solar projects with a total capacity
of 290MW and five energy storage projects with 70MW of capacity.
Gresham House New Energy and Noriker Power have collaborated since
2016 to develop 70MW of operational ESS projects which will form
the seed portfolio in the Company. Noriker Power is 28% owned by
Gresham House and is a specialist in the design of battery control
systems. It provides a sound technical underpinning and oversight
of operational ESS projects. Gresham House New Energy was formed in
November 2017 after Gresham House, the specialist alternative asset
manager, acquired Hazel Capital LLP.
John Leggate, Chairman of Gresham House Energy Storage Fund,
said: "We believe ESS has significant potential from an investment
standpoint and is fundamental to a renewable energy future in the
UK. We are confident that the experience and expertise of our team,
coupled with our identified seed portfolio and firm pipeline will
be able to deliver excellent near-term shareholder value in what is
a rapidly emerging next generation infrastructure sector."
Board of Directors
The Company's board of directors (the "Board") comprises three
non-executive directors, all whom are independent of Gresham House,
and responsible for the determination of the investment policy of
the Company as well as the supervision of the implementation of
such policy. The Board currently consists of:
John S. Leggate CBE, FREng (Chairman and Independent
Non-Executive Director) - John is highly experienced as an energy
sector executive and is a venture investor in the "clean tech" and
digital technologies. John has significant board experience and is
currently on the board of cyber security rm Global Integrity in
Washington DC and is an advisor to the Board of ACWA International,
the largest independent power producer in Saudi Arabia.
Duncan Neale (Audit Committee Chairman and Independent
Non-Executive Director) - Duncan is a CFO & Finance Director
with over twenty years of commercial experience working for both
publicly listed and privately-owned companies. Duncan is a Fellow
of the Institute of Chartered Accountants and quali ed with Price
Waterhouse in London.
David Stevenson (Independent Non-Executive Director) - David is
a nancial journalist and commentator for a number of leading
publications including The Financial Times (the Adventurous
Investor), Investment week (The contrarian), Money Week and the
Investors Chronicle. He is also executive director of the world's
leading alternative nance news and events service www.alt .com,
which focuses on covering major trends in marketplace lending,
crowdfunding and working capital provision for small to medium
sized enterprises.
Expected timetable
Placing Opens 17 October 2018
Offer for Subscription opens 17 October 2018
------------------------------
Latest time and date for receipt 11.00 a.m. on 31 October 2018
of Application Forms under the
Offer for Subscription and payment
in full or settlement of the
relevant CREST instruction
------------------------------
Latest time and date for receipt 12.00 p.m. on 31 October 2018
of Placing orders
------------------------------
Admission of the Ordinary Shares 8.00 a.m. on 5 November 2018
to the Specialist Fund Segment
and dealings commence
------------------------------
CREST accounts credited in respect as soon as practicable after
of Ordinary Shares issued in 8.00 a.m. on
uncertificated form 5 November 2018
------------------------------
Certificates despatched in respect week commencing 19 November
of Ordinary Shares issued in 2018
certificated form
------------------------------
Placing Programme opens 6 November 2018
------------------------------
Placing Programme closes 16 October 2019
------------------------------
Capitalised terms used in this announcement but not defined
herein bear the meanings ascribed to them in the Prospectus.
For further enquiries, please contact:
Gresham House New Energy
Ben Guest +44 (0) 20 3837 6270
Cantor Fitzgerald Europe
Richard Harris +44 (0) 20 7894 8229
Robert Peel +44 (0) 20 7894 7719
Alan Ray +44 (0) 20 7894 8590
Montfort Communications greshamhouse@montfort.london
Gay Collins / +44 (0) 779 862 6282
Louis Supple /
+44 (0) 203 770 7907
About Gresham House
Gresham House plc is an AIM quoted specialist asset manager
providing funds, direct investments and tailored investment
solutions, including co-investment across a range of highly
differentiated alternative investment strategies. Our expertise
includes timber, renewable energy, housing and infrastructure,
strategic public and private equity, (private assets). The Group
aims to deliver sustainable financial returns and is committed to
building long-term partnerships with clients, (institutions, family
offices, high-net-worth individuals, charities and endowments and
private individuals) to help them achieve their financial
goals.
Shareholder value creation will be driven by long-term growth in
earnings as a result of increasing AUM and returns from invested
capital.
www.greshamhouse.com
* This is a target only and is based on current market
conditions as at the date of the Prospectus and is not a profit
forecast. There can be no assurance that this target will be met or
that the Company will make any distributions at all. This target
should not be taken as an indication of the Company's expected or
actual current or future results. The Company's actual return will
depend upon a number of factors, including but not limited to the
size of the Issue, the Company's net income and the Company's
ongoing charges figure. Potential investors should decide for
themselves whether or not the return is reasonable and achievable
in deciding whether to invest in the Company.
** This target assumes leverage is introduced once gross
proceeds have been fully invested and certain further asset
management activities are completed in respect of the ESS projects.
All references to leverage refer to the ratio of borrowings to Net
Assets.
*** Pipeline projects do not have EPC contracts in place.
Gresham House Group has exclusivity in place and is in advanced
stages of negotiations to acquire the further pipeline project of
80MW currently in an advanced stage of negotiation. This site has a
full suite of project rights. Additional pipeline includes one
project of 50MW in which members of the Gresham House New Energy
management team have an interest and which has a full suite of
project rights as well as several other projects at various stages
of development.
This announcement is intended for persons in the UK who are
investment professionals under Article 19 of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 or high net
worth companies or other persons falling within Article 49 of that
Order.
The Company is subject to a number of risks. These include the
reliance on third party providers to carry on its business and
there being no material adverse change in laws or regulations which
affect the Company or its portfolio. In addition, if the growth in
renewable energy does not continue as expected this may have an
adverse impact on the Company's performance. When certain contracts
with National Grid Electricity Transmission PLC expire the Company
may not be able to obtain contracts on the same terms or at all
which may harm the performance of the Company. The introduction of
leverage by the Company may increase the volatility of returns and
providers of leverage would rank ahead of investors. A full
explanation of risks is in the Prospectus.
The Company will pay an annual fee to Gresham House based on its
net assets namely 1 per cent. on the first GBP250 million of net
assets, 0.9 per cent on net assets between GBP250,000,001 and
GBP500 million and 0.8 per cent on net assets in excess of GBP500
million, plus VAT. The Company will also reimburse reasonable
expenses incurred by Gresham House incurred in performance of its
management of the Company.
This announcement has been issued by Gresham House Asset
Management Limited, which is authorised and regulated by the
Financial Conduct Authority.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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