Gore Street Energy Storage Fund (GSF) has announced that JXTG Nippon Oil & Energy Corporation of Japan has subscribed for £2,883,000 (before expenses) of its shares in a direct subscription. In tandem with this, the company has also separately announced a retail offer that it to be conducted through the PrimaryBid platform, as well as a placing of new shares, by way of an accelerated bookbuild process by Shore Capital and co-placing agent Zeus Capital, pursuant to the company’s existing placing programme. GSF says that it will use the funds raised for both its significant development pipeline as well as highly attractive near-term potential acquisitions.
About JXTG Nippon Oil & Energy Corporation
JXTG Nippon Oil & Energy Corporation is a subsidiary of JXTG Holdings Inc., one of Japan’s largest energy companies. JXTG has subscribed for 3,000,000 new Ordinary Shares of 1p each at a price of 96.1p per share. The issue price is equal to GSF’s last published as at 31 December 2019. GSF Investment adviser says that it believes that this NAV is not materially different from what is expected for the next NAV update to 31 March 2020. GSF says that JXTG’s investment is a key part of JXTG’s long-term strategy to diversify from oil and broaden its range of power sources to reduce the carbon footprint from its electricity business.
The PrimaryBid retail offer
In addition to the JXTG placing, there will be an offer of new ordinary shares on the PrimaryBid platform at the Issue Price for retail investors to participate in. Like the placing, the issue price is 96.1 pence per New Ordinary Share. This being the NAV as at 31 December 2019, and a discount of 3.2% to the last 30-day volume weighted average price of 99.3 pence per Ordinary Share. This will give both private and other investors the opportunity to participate in the PrimaryBid Offer by applying exclusively through the www.PrimaryBid.com platform and the PrimaryBid mobile app (available on the Apple App Store and Google Play).
The PrimaryBid Offer, which may close early if it is oversubscribed, will be open to individual and other investors from 7.01 a.m. on 19 June 2020 to 3.00 p.m. on 2 July 2020. Subscriptions will be considered by the Company on a “first come, first served” basis. GSF says that no commission is charged to investors on applications to participate in the PrimaryBid Offer made through PrimaryBid. However, once an application for New Ordinary Shares has been made and accepted via PrimaryBid, an application cannot be withdrawn.
Placing programme
Following the subscription by JXTG, there remains up to 78 million new Ordinary Shares available for issuance pursuant to the Placing Programme. GSF says that proceeds from the capital raise will be deployed towards both the Company’s significant development pipeline and highly attractive near-term potential acquisitions. The new Ordinary Shares will, when issued, rank pari passu with the existing Ordinary Shares and will be eligible for the dividend in respect of the period from 1 January to 31 March 2020.
Pipeline and EPC Update
After announcing exclusivity on a 140MW GB storage pipeline on 28 February 2020, GSF says that it expects to update the market on a further 50MW acquisition in Scotland shortly. Additionally, the Company has secured exclusivity on a new 20MW asset near London which is also undergoing due diligence with a view to acquisition in the near term. GSF says that it has an additional 900MW in exclusivity and/or pipeline.
NEC Energy Solutions
GSF says that, regarding recent press commentary that NEC Energy Solutions Inc intends to ‘wind down operations’, this is not expected to have any impact on GSF’s established operations or development projects. The Company understands that NEC will ‘complete its existing operations’ and remains ‘committed to finishing projects under development’. NEC’s obligations to existing projects are understood to last until 2030 and operational projects remain secured with a parental guarantee. GSF also says that NEC has confirmed that it has no intention to sell its holding in GSF, and, if that changed, being a substantial international group they would only do so in an orderly fashion to ensure that they realised full value for their investment.
Over recent years, the number of possible Engineering, Procurement and Construction (“EPC”) contractors that the Company can engage with for each project has increased substantially, driving down project costs significantly to Gore Street’s advantage and following a similar pattern that the Adviser saw in the emerging solar and wind markets. In 2016 there were only three possible EPC partners available to the Company and there are now approximately fifteen.
Dividend Declaration
GSF has declared an interim dividend of 1.0p per ordinary share for the period from 1 January 2020 to 31 March 2020. In accordance with the dividend target for the year, the Company has announced a total dividend of 7.0 pence per share for the period of 1 April 2019 to 31 March 2020. The dividend will be paid on or around 23 July 2020 to Shareholders on the register on 10 July 2020. The ex-dividend date will be 9 July 2020.
[QD comment: GSF needs to scale up and it certainly looks to be working hard to raise its profile with all types of investors. We welcome these efforts; this is a space that needs lots more investment, to help us move to a low carbon world, yet there are still relatively few options for smaller investors who want to participate in battery storage revolution.]