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.”
Gresham House Plc (LON:GHE) – Gresham House Energy Storage Fund plc (LSE: GRID) today announced the publication of a Prospectus relating to its intention to float with a target to raise gross proceeds of up to £200 million from the IPO and the subsequent placing programme.
The Company will invest in utility-scale Energy Storage Systems 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 £57.22 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 £200 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 £30 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 £33.5 million, which would comprise, in aggregate, approximately 16.75 per cent. of Ordinary Shares issued by the Company on first Admission, assuming that £200 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.
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 firm 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 qualified with Price Waterhouse in London.
David Stevenson (Independent Non-Executive Director) – David is a financial 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 finance news and events service www.altfi.com, which focuses on covering major trends in marketplace lending, crowdfunding and working capital provision for small to medium sized enterprises.
