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SIMEC Atlantis raises £5mln through placing and subscription to help fund GHR acquisition

The group said it would issue around 31.4mln new shares at a price of 16p each, a 5.9% discount to Thursday's closing price
Money wad
The proceeds would be used to pay part of the £124.7mln cost of the GHR acquisition

SIMEC Atlantis Energy Limited (LON:SAE) has raised £5mln in a share placing and subscription to help fund its acquisition of SIMEC Green Highland Renewables (GHR).

The group, which focuses on sustainable energy, said it would issue around 31.4mln new shares at a price of 16p each, a 5.9% discount to Thursday's closing price.

READ: SIMEC Atlantis advances connection strategy at MeyGen tidal power project

The subscription part of the fundraising had taken place on PrimaryBid.com, a website that allows retail investors to buy shares at the same discount as institutions.

SIMEC said proceeds of the fundraising would be used to pay part of the £124.7mln cost of the GHR acquisition, which was agreed in November last year.

Under the terms, the company will pay £29.7mln upfront, comprising cash of £14.85mln for GHR’s equity and some existing debt, with a further £95mln secured by long-term project finance.

GHR, which is focused on hydro-electricity generation, has a portfolio of 15 mini-projects with a total operational capacity of 20 megawatts (MW), as well as one project under construction and one project in development that can add a further 8MW.

READ: SIMEC Atlantis Energy acquires hydro-generation portfolio from major shareholder

The company said once completed the GHR acquisition would provide “an immediate and material contribution” to its earnings and cash flow as well as further growth opportunities for its hydroelectric platform.

“This capital raise helps us towards completion of the acquisition of this unique portfolio of Scottish hydro assets,” said Tim Cornelius, chief executive of SIMEC Atlantis.

“Completion of this acquisition together with our portfolio of hydro, tidal power and waste-to-energy projects across Scotland and Wales, would make us an important player in the United Kingdom's endeavours to decarbonise responsibly whilst at the same time creating domestic employment opportunities and attracting inward investment."

In lunchtime trading Friday, SIMEC Atlantis shares were down 4.4% at 16.3p.

-- Adds results of placing and subscription and updates share price --

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