Gresham House Energy Storage (GRID), currently the UK’s largest fund investing in utility-scale energy storage systems, is set to grow after announcing a new share issuance programme to be conducted over the next 12 months. The initial placing and offer for subscription are launching today. In the announcement, GRID says that “it intends to build on its leading market share and significantly increase the size of its portfolio over the coming 12 to 18 months to take advantage of the clear and compelling market opportunity for energy storage system projects (ESS projects).”
‘Shares to be issued at a 4.5% discount to the closing share price on 9 November 2020’
GRID will issue new ordinary shares by way of the initial placing and initial offer for subscription at an issue price of 105.0p. This represents a discount of approximately 4.5% to the closing share price of 110.0p on 9 November 2020 and a premium of approximately 4.2% to the last reported NAV of 100.77p, as at 30 September 2020.
‘New pipeline represents 10 projects with a total expected outlay of approximately £200m’
Under the share issuance programme, GRID may issue up to a maximum of 250m new ordinary shares over the next 12 months. The proceeds from the initial tranche are expected to be used to finance near term opportunities in the new pipeline, which comprises up to c.485MW of ESS projects currently being progressed by GRID’s manager. GRID notes that the growth of storage is addressing the need for energy storage systems as renewable electricity penetration continues to rise.
The new pipeline represents 10 projects with a total expected consideration of approximately £200m, of which the net proceeds of the initial tranche are intended to be used to finance up to 5 new near term acquisitions totalling c.195MW.
John Leggate CBE, GRID’s chairman, noted: “Over the last few years we’ve seen real growth in the quantum of deal flow and new developments within the energy storage market and in batteries specifically. The drivers behind this growth are now increasingly obvious and we believe we are getting closer to a tipping point where battery-based storage is becoming a strategic imperative in the UK’s journey towards delivering a net-zero carbon future. GRID is taking advantage of its strong deal flow and organisational capabilities to cement its leadership position in this sector.”
‘Dividend target for FY to 31 December 2020 represents a 6.7% yield at the issue price’
GRID also reaffirmed its target for dividends over the financial year-ending 31 December 2020. A dividend target of 7.0p paid quarterly, would represent a yield of 6.7% at the issue price
GRID: Gresham House Energy Storage prepares to grow with new share issuance programme