Notice of General Meeting

RNS Number : 2581D

Gresham House Energy Storage Fund

27 October 2020

 

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO U.S. PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR THEIR RESPECTIVE TERRITORIES OR POSSESSIONS, OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO ISSUE OR SELL, OR ANY SOLICITATION OF ANY OFFER TO SUBSCRIBE OR PURCHASE, ANY INVESTMENTS IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

27 October 2020

Gresham House Energy Storage Fund PLC  

Notice of General Meeting

Gresham House Energy Storage Fund PLC ("GRID" or the "Company"), the UK's largest fund investing in utility-scale energy storage systems , will today post a circular convening a general meeting (the "General Meeting") to be held at 10 a.m. on Thursday, 19 November 2020 (the "Circular").

The Circular provides further information on the Company's pipeline of investment opportunities over the next 12 to 18 months and seeks Shareholder authority for the Company to: (1) allot up to 250 million new Ordinary Shares and/or new C Shares in aggregate on a non pre-emptive basis pursuant to a new share issuance programme; and (2) make certain changes to the Company's investment policy to provide the Company with greater investment flexibility, thereby enhancing its pipeline of investment opportunities (together the "Proposals").  

Supportive market backdrop and a strong pipeline of new investment opportunities

As at the date of this announcement, the total capacity of operational utility-scale energy storage projects in the Company's Portfolio is 215MW, which is expected to rise to approximately 350MW by the end of 2020. The Company intends to build on its leading market share and significantly increase the size of the Portfolio over the coming 12 to 18 months to take advantage of the clear and compelling market opportunity for ESS Projects utilising batteries. The Company will seek to acquire up to an additional c.485MW of ESS Projects currently being progressed by the Manager (the "New Pipeline"), comprising approximately 400MW of new build ESS Projects based in Great Britain (subject to shareholder approval being granted at the General Meeting), 45MW of operational ESS Projects in Great Britain and a single c.40MW project in the Republic of Ireland.

The New Pipeline will either be exclusive to the Company, owned by the Gresham House Group, or exclusive to the Gresham House Group while due diligence is completed. Any ESS Project owned by the Gresham House Group is held exclusively for the Company.

The New Pipeline comprises, in Great Britain:

· seven new-build projects which are all at least 50MW,

· two operational projects,

and in the Republic of Ireland:

· a single project which the Manager intends to operate in the DS3 tariff-uncapped regime, being the multi-year regime started by EirGrid plc and its subsidiaries

As a result of the Manager's ability to source attractively priced projects and efforts to drive best practice in relation to the design, contracting and other operational facets, the Manager expects, based on current market conditions, that the New Pipeline can be acquired by the Company at an improved IRR compared with the average achieved in relation to the existing Portfolio. The New Pipeline is, in the opinion of the Manager, therefore capable of being accretive to the Company's cashflow per share at a revenue level which is meaningfully lower than that required by the existing Portfolio.

Recommended proposal to authorise the Board to issue Shares on a non-pre-emptive basis

In order to assist in financing the Company's New Pipeline, it is proposed that up to 250 million New Shares be issued by the Company pursuant to a new share issuance programme (the "New Shares"). The Company currently expects to publish a prospectus in the near term pursuant to which New Shares may be issued. Any such New Ordinary Shares will be issued at a price representing a premium to the last reported Net Asset Value per Ordinary Share at the time of the relevant allotment. The Directors believe the issuance of New Shares will have the following benefits for Shareholders:

· The additional capital raised will enable the Company to take advantage of current and future investment opportunities thereby further diversifying its Portfolio;

· Acquiring ESS Projects forming the New Pipeline is accretive to the Company's cashflow per share based on base case revenue assumptions;

· An increase in the market capitalisation of the Company will help to make the Company more attractive to a wider investor base;

· It is expected that the secondary market liquidity in the Ordinary Shares will be further enhanced as a result of a larger and more diversified shareholder base;

· The Company's fixed running costs will be spread across a wider shareholder base, thereby reducing the ongoing costs ratio; and

· Any issuance of New Ordinary Shares will be undertaken at a premium to NAV which will enhance the NAV per existing Ordinary Share.

Recommended proposal to make certain changes to the Company's Investment Policy

To date, the Company's investment policy has prevented the Company from investing in ESS Projects where construction is not substantially complete or from lending funds to ESS Project Companies other than for purchases of equipment.

The Manager has advised the Board that in the Manager's view, it would be beneficial for the Company to amend its investment policy to allow the Company to acquire ESS Projects or rights to acquire ESS Projects which are ready to build that, as a minimum, have in place a completed lease, lease option or agreement for lease, on satisfactory terms in relation to the land where that ESS Project is situated, full planning permission enabling the construction of a suitable ESS Project on that land, a grid connection offer, and an agreed form EPC contract or EPC management contract suite ("Ready to Build Projects").  

The Investment Policy would also be amended to allow the Company to provide loan finance to Ready to Build Projects for payments under the EPC contract or EPC management contract suite (which cannot be classed as being for equipment), provided that no more than 10 per cent. of Gross Asset Value (calculated at the time that finance is provided based on the latest available valuations) may be exposed in aggregate to any such loans.

The proposed amendments will allow the Company to benefit from a greater selection of projects and contractors, lower costs and less drag on income.

The proposed amendments would also allow greater choice over the underlying ESS Projects, allowing the Manager to be more selective in the opportunities which it pursues on behalf of the Company. The ability to make milestone payments during construction also leads to greater selection of project rights as some pipeline is offered for sale with pre-agreed construction contracts in place. 

The Board and the Manager will adapt due diligence and approval processes and requirements to manage and mitigate the incremental risks arising as a result of the change in the Company's investment policy. Further details of those processes can be found in the Circular.

In addition to the amendments noted above, minor amendments to the Company's investment policy are also being proposed in order to clarify it and to remove out-of-date references. The existing investment policy and the existing investment policy marked-up to show the proposed changes are set out in the Circular.

Further information

Resolution 1 will be proposed as an ordinary resolution to authorise the Company to allot New Shares. Resolution 2 will be proposed as an ordinary resolution to approve the proposed amendments to the investment policy of the Company described above. Resolution 3 will be proposed as a special resolution to authorise the Company to disapply pre-emption rights in relation to the New Shares to be issued pursuant to Resolution 1 above.

Each resolution is independent of the other and all resolutions will need to be individually passed by Shareholders in order to implement the Proposals. Shareholders are therefore asked to vote in respect of each of the resolutions.

Recommendation

The Directors consider the Proposals to be in the best interests of Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. The Directors intend to vote in favour of the Resolutions in respect of their holdings of Ordinary Shares amounting to 62,814 Ordinary Shares in aggregate (representing approximately 0.0268 per cent. of the issued Ordinary Share capital of the Company as at 26 October 2020).

Any decision to proceed with the publication of a Prospectus is at the absolute discretion of the Directors and will be subject to prevailing market conditions and investor sentiment. Should the Company decide to proceed with such a publication, a further announcement will be made in due course.

Further information on the Proposals, including the relevant Resolutions, can be found in the Circular which can be found on the Company's website at https://newenergy.greshamhouse.com/esfplc/ and will also available on the national storage mechanism at https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism .

Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Circular.

The information contained in this announcement may constitute inside information. The person responsible for the release of this announcement on behalf of the Company is JTC (UK) Limited.

For enquiries, please contact:

Gresham House New Energy Ben Guest Rupert Robinson	[phone]
Jefferies International Limited Stuart Klein Gaudi Le Roux Neil Winward	[phone]
KL Communications Charles Gorman Camilla Esmund Alex Hogan	[e-mail] [phone]

About the Company and the Manager:

Gresham House Energy Storage Fund PLC owns a portfolio of utility-scale operational energy storage systems (known as ESS) located in Great Britain. The current portfolio has a total capacity of 215MW. The Company is managed by Gresham House Asset Management Limited under the leadership of Ben Guest. The Company was admitted to trading on the London Stock Exchange (Specialist Fund Segment) on 13 November 2018 (the "IPO") having raised £100 million of gross proceeds from investors. Since IPO the Company has raised a total of approximately £238 million of gross proceeds from investors.

The Gresham House New Energy team has a proven track record in developing and operating energy storage and other renewable assets having developed 124MW of Energy Storage Systems and approximately 290MW of predominantly ground-mounted solar projects. Gresham House Asset Management currently manages 207MW of solar and wind energy projects.

Gresham House Asset Management is the FCA authorised operating business of Gresham House plc, a London Stock Exchange quoted specialist alternative asset manager. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

www.greshamhouse.com

Definition of Utility-scale battery Storage Systems

Utility-scale battery storage systems are the enabling infrastructure that will support the continued growth of renewable energy sources such as wind and solar, essential to the UK's stated target to reduce carbon emissions. They store excess energy generated by renewable energy sources and then release that stored energy back into the grid during peak hours when there is increased demand.

LEI number: 213800MSJXKH25C23D82

DISCLAIMERS

This announcement has been prepared for information purposes only. This announcement is not an offer to sell or a solicitation of any offer to buy New Shares in the United States, Australia, Canada, the Republic of South Africa, the Republic of Ireland or Japan, or any of their respective territories or possessions, or in any other jurisdiction where such offer or sale would be unlawful. No action has been taken by the Company or Jefferies that would permit an offering of any shares in the capital of the Company or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and Jefferies to inform themselves about, and to observe, such restrictions.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold, resold, transferred or delivered directly or indirectly in the United States, or to, or for the account or benefit of, U.S. Persons, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Ordinary Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the Ordinary Shares may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act. 

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the Company. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.

This announcement may not be used in making any investment decision in isolation. This announcement on its own does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment. This announcement does not constitute or form part of and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement or its completeness.

The information and opinions contained in this announcement are provided as at the date of the announcement and are subject to change without notice and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, the Manager, Jefferies or any of their affiliates or by any of their respective officers, employees or agents to update or revise publicly any of the statements contained herein. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness. The document has not been approved by any competent regulatory or supervisory authority.

Potential investors should be aware that any investment in Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person. Any data on past performance contained herein is no indication as to future performance and there can be no assurance that any targeted or projected returns will be achieved or that the Company will be able to implement its investment strategy or achieve its investment objectives. Any target returns published by the Company are targets only. There is no guarantee that any such returns can be achieved or can be continued if achieved, nor that the Company will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by the Company to be materially lower than the target returns of the Company.

The information in this announcement may include forward-looking statements, which are based on the current expectations, intentions and projections about future events and trends or other matters that are not historical facts and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereof) or other variations thereof or comparable terminology. These forward-looking statements, as well as those included in any related materials, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions about the Company and other factors, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur and actual results may differ materially from those expressed or implied by such forward looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. 

Each of the Company, the Manager, Jefferies and their affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom.

No representation or warranty is given to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views contained herein are based on financial, economic, market and other conditions prevailing as at the date of this announcement. The information contained in this announcement will not be updated.

 

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