Grant of Investment Rights Over GEM, Conditional Loan Facility with Vela Technologies, Appointment of Executive Director and Proposed Issuance of Equity
21/10/2024 07:00
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014, AS AMENDED ("MAR"). ON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Igraine plc
AQSE: KING
("Igraine" or "the Company")
Grant of Investment Rights Over GEM Energia Limited
Conditional Loan Facility with Vela Technologies plc
Appointment of Executive Director
Proposed Issuance of Equity
The Board of Igraine (AQSE: KING), an investment issuer focused on
opportunities in breakthrough technologies and life sciences, is pleased to
announce several significant developments, including the grant of investment
rights over GEM Energia Limited ("GEM"), the establishment of a Convertible
Loan Facility with Vela Technologies plc ("Vela") and the appointment of Mr
David Levis as an Executive Director.
Highlights:
* Secured exclusive investment rights in relation to GEM and its subsidiaries,
including a right of first refusal on all current and future battery storage
projects within GEM's portfolio.
* Conditional loan facility from existing substantial shareholder, Vela, with
a minimum £200,000 commitment and the first £50,000 tranche being drawn down
on the passing of the Resolutions at the AGM.
* Appointment of David Levis, who has wealth of experience working with energy
projects, including battery storage.
* Issue 35,510,811 new ordinary shares to GEM as consideration for the
exclusive investment rights.
* Change of investment strategy to accommodate the exclusive rights in the
battery storage renewable energy space.
* Government scheme to attract investment in renewable energy storage
announced : New scheme to attract investment in renewable energy storage -
GOV.UK
(https://www.gov.uk/government/news/new-scheme-to-attract-investment-in-renewable-energy-storage)
Subject to AGM approval
The Company will notify shareholders shortly of its impending Annual General
Meeting, that will provide further detailed information on the above
agreements entered into that are subject to AGM approval.
GEM Energia Limited
GEM was established by David Levis, distinguished and specialised in the
development of battery energy storage systems across the UK. Operating through
wholly-owned subsidiaries, GEM is dedicated to increasing the number of
battery storage sites across the country aimed at stabilising the national
grid and supporting the integration of renewable energy sources. As the UK
continues its transition to greener energy solutions, battery storage
facilities play a critical role in addressing the increasing demand for energy
storage. These systems enable excess electricity, often generated by renewable
sources such as solar and wind, to be stored and deployed during periods of
high demand, thus ensuring the efficient utilisation of renewable resources
and enhancing grid stability.
GEM identifies and secures the rights over development sites for battery
energy storage facilities, which are then required to go through a full
planning process. Initially obtained through an option agreement and a letter
of authority from the landowner, these sites are converted into long-term
lucrative leases for the landowner once the site is built out. With its
extensive network of industry professionals, GEM manages the planning process
and secures the requisite approvals from the National Grid or Distribution
Network Operators ("DNO"). Upon securing a grid connection contract, GEM
proceeds with the planning process through to the "Ready to Build" (RTB)
stage, which is where an institution can acquire the site and build out the
battery storage facility.
With GEM's expertise and its commercial partners, each project undergoes
thorough due diligence and financial modelling at the outset, which
significantly de-risk the planning process and site feasibility. Battery
storage is considered to be crucial to the future security of the UK's energy
supply and, by being classified as critical infrastructure, these projects are
more likely to achieve planning consent by making a case of `very special
circumstances' during the planning process.
Once a project reaches RTB, GEM will evaluate each site individually to
determine whether to sell the site, which is currently the preferred option,
or to proceed with development and operation of the facility. This flexible
approach allows GEM to maximise the value of each project according to
prevailing market conditions and strategic objectives.
Grant of Investment Rights
Igraine is pleased to announce that it has secured exclusive investment rights
in relation to GEM and its subsidiaries, including a right of first refusal on
all current and future battery storage projects within GEM's portfolio.
This agreement provides Igraine with the unique opportunity to invest in and
support the development of GEM's battery storage sites as they advance
planning towards the RTB stage. The right of first refusal ensures that
Igraine has priority to participate in these high-value projects ahead of
other potential investors.
In consideration of these exclusive investment rights, and subject to
shareholder approval at the upcoming AGM, Igraine will issue 35,510,811 new
ordinary shares, representing 29.10% of Igraine's enlarged share capital, to
GEM. This issuance forms a key component of the agreement, granting GEM a
significant equity stake in Igraine in return for these valuable rights.
The Board believes that this agreement strategically positions Igraine to
benefit from the substantial value appreciation as GEM's projects progress
through the planning stages to RTB and are ultimately exited or monetised.
Upon reaching the RTB stage, Igraine will have the flexibility either to sell
the sites, securing 85% of the sale proceeds, or to continue developing the
projects. For the initial projects, it has been mutually agreed that the sites
will be sold, with the expectation that they will provide a significant uplift
to Igraine's balance sheet.
GEM is led by David Levis and Andrew Brown, who, together with their team,
work closely with international infrastructure partners to bring these
projects to fruition. The combined team is vastly experienced in the
renewable, planning, and financial sector.
GEM has a pipeline of over 12 sites that are undergoing analysis and
due-diligence but has 4 sites where this work has been completed and with
letters of authority in place and conversations with the National Grid and
DNOs underway. Each site typically requires between £150,000 and £250,000 to
secure contracts/grid connection offers and proceed through planning to RTB.
Once a site reaches RTB, it generally has a value of approximately £120,000
per megawatt (MW) of connection capacity. After accounting for grid costs,
this equates to netb proceeds of circa £70,000-£90,000 per MW. For an
average site capacity of 100MW, this could generate proceeds of circa £7-9
million. GEM's largest current project is 250MW.
At a later stage, by opting to develop the sites, Igraine would earn revenue
based on the storage capacity of each battery energy facility over a circa
40 year income cycle, receiving payments per watt of energy purchased, stored
and exported to the grid, thereby offering a consistent and potentially
substantial revenue stream.
Loan Facility with Vela
In light of these strategic developments, Igraine is pleased to announce the
establishment of a Convertible Loan Note facility with Vela, Igraine's largest
shareholder, holding 27.66% of the Igraine's current issued share capital.
This facility is the first step in providing the necessary capital to support
the development of Igraine's strategic initiatives, particularly its
investment rights in GEM's battery storage projects.
The loan facility, totalling £500,000, will be drawn down in tranches of
£50,000, with an initial minimum commitment of £200,000 and the first
tranche being drawn down on passing the Resolutions at the AGM. This structure
provides Igraine with the flexibility to access capital as the projects
advance. Vela's continued support underscores its confidence in Igraine's
ability to deliver value through its expanded investment strategy.
This Agreement shall be deemed valid and enforceable only upon the fulfilment
of the condition that GEM Energia successfully enters into its investment
rights, which is contingent on the issuance of 35,510,811 New Ordinary Shares
to GEM Energia. In the event that such issuance does not occur, this Agreement
shall have no force or effect, and neither party shall be bound by any of the
provisions herein.
Appointment of David Levis
Igraine is pleased to announce the appointment of David Levis as Executive
Director, subject to the passing of the relevant resolutions at Igraine's
upcoming AGM. Mr. Levis, the CEO of GEM, brings a broad foundation of
knowledge gained from over a decade of working with energy projects, including
battery storage, solar energy, and energy-from-waste initiatives. His
extensive expertise in corporate finance, developed during his tenure with
KPMG Corporate Finance and BDO Corporate Finance, equips him with a deep
understanding of public offerings, private placements, and acquisition
strategies.
Mr. Levis has demonstrated a strong track record in structuring both debt and
equity financing for energy projects and has a solid understanding of capital
markets. His experience spans a variety of sectors, having served on the main
boards of companies involved in renewable energy, property development, and
aerospace. Mr Levis' broad experience across multiple industries, combined
with his deep sector knowledge, position him as a key asset in driving
Igraine's future growth.
Commenting on his appointment, Mr. Levis stated, "Having spent months working
closely with Steve Winfield and Simon Grant-Rennick to formulate this
transaction, I am confident that together we can transform this business into
a dynamic, value-creating public company. I look forward to updating the
market and our stakeholders as we progress."
Directors' Comments
Steve Winfield, Executive Director, commented: "Securing these investment
rights for Igraine marks a pivotal step forward for the business. David Levis
and his team are remarkably passionate and knowledgeable about the battery
storage sector and planning process. They are now ready to execute their plans
to bring forward sites immediately. We believe this partnership has the
potential to create significant value and upside for our shareholders as sites
are exited at RTB stage. We would like to thank Vela for our first funding
facility. Our job is now to deliver vastly more funds than this and our focus
is to prioritise this to be non-dilutive and structured appropriately''.
Simon Grant-Rennick, Non-Executive Director, commented: "The steps we are now
taking represent a significant milestone for Igraine. This partnership with
GEM positions Igraine at the forefront of a critical and rapidly growing
sector. With our strengthened strategy, we are poised to make substantial
progress, bringing forward high-value projects that will drive long-term
growth. I am confident that these developments will deliver meaningful returns
for our shareholders and cement Igraine's position as a key player in the
energy storage market."
Sector Overview and Strategic Alignment
The energy storage sector is experiencing rapid growth, driven by the global
transition to renewable energy. Battery energy storage systems play a crucial
role in supporting the integration of renewable energy into national grids,
ensuring the reliability and stability of energy supplies. As governments,
including the UK, increase investment in energy infrastructure, battery
storage has been recognised as critical infrastructure, underpinning the
national transition to net-zero emissions by 2050.
Igraine's partnership with GEM provides it with exclusive access to a pipeline
of sites that will advance through the planning process, with the potential
for substantial value appreciation as these projects progress. Recent industry
transactions, such as Zenobe Energy's £150 million fundraising and Harmony
Energy's £186 million battery storage project, underscore the significant
investor interest in the sector. With market forecasts predicting over 10GW of
new capacity by 2030, Igraine is well-positioned to capitalise on this growing
market opportunity.
The Directors of the Company, who have issued this RIS announcement after due
and careful enquiry, accept responsibility for its content.
Enquiries
Company:
Steve Winfield (Executive Director)
Steve@igraineplc.com
Simon Grant-Rennick (Non-Executive Director)
Simon@igraineplc.com
Investor relations : info@igraineplc.com
AQSE Growth Market Corporate Adviser:
Peterhouse Capital Limited
Copyright (c) 2024 PR Newswire Association,LLC. All Rights Reserved