Important information

Gore Street, London's first listed energy storage fund supporting the transition to low carbon power, will shortly post a circular convening a general meeting (the "General Meeting") to be held at 10:30 a.m. on Monday, 7 December 2020 (the "Circular").

The purpose of the Circular is to provide Shareholders with details of a proposed new Share Issuance Programme to take advantage of an attractive pipeline of investment opportunities, which have a total project size of 1.3GW. In doing so, the Company intends to significantly increase the size of its Portfolio and execute against its exclusive near-term pipeline to capitalise on the continued growth in demand for energy storage assets.

The Company is proposing to issue up to 60 million new Ordinary Shares by way of an Initial Placing, Offer for Subscription and Intermediaries Offer (the "Initial Issue"). Following the Initial Issue, the Directors intend to implement a Placing Programme to raise capital for further investment through the issue of up to 250 million Ordinary Shares (less the number of Ordinary Shares issued pursuant to the Initial Issue).

The implementation of the Share Issuance Programme requires the production of a prospectus which the Company expects to publish in the near term. 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.

Introduction

The Company was launched as a closed-ended investment company in May 2018 with the investment objective of providing Shareholders with an attractive income over the long term by investing in a diversified portfolio of utility scale energy projects. The Company raised gross proceeds of £30.6 million on First Admission which were invested in an initial portfolio of four energy storage assets totalling 29MW. Since then the Company has issued new Ordinary Shares (by way of public offer, institutional placing or direct subscriptions) to raise further gross proceeds of £51.2 million for investment in accordance with the Company's investment objective and policy. As at the date of this announcement, the Group's portfolio comprised 14 projects with a total capacity of 320MW including projects under construction. Operational assets represented 110 MW of this total.

Energy storage is a market which is undergoing continued and transformative growth in the UK and globally. The fundamental growth driver is the steady increase in intermittent renewable energy capacity combined with a need for grid stability and electricity price stability.  Storage projects are well positioned to address these issues. As a result, energy storage is a key part of government energy policy, helping to deliver the low-carbon electricity sector that is the stated goal of the UK, the EU and many other countries. The growth in energy storage assets is therefore anticipated to increase in these markets as the levers that drive their growth further develop. The Board, having been advised by the Investment Manager, considers that the Company remains ideally positioned to capitalise on this anticipated increase in demand for energy storage assets.  The Company is therefore seeking to raise equity capital to acquire new projects in its pipeline and/or to fund capital expenditure requirements of investments in the Group's existing portfolio. As at the date of this announcement, the Investment Manager has identified a pipeline of investment with a total project size of 1.3 GW.

In order to raise the required equity capital, the Company is proposing to put in place a new Share Issuance Programme for up to 250 million new Ordinary Shares. The Share Issuance Programme is expected to be completed by way of an Initial Issue, comprising an Initial Placing, Offer for Subscription and Intermediaries Offer of up to 60 million Ordinary Shares, following which, the Directors intend to implement the Placing Programme to raise capital for further investment. In addition, the Company may seek to raise capital through direct subscriptions (including NTMA Subscriptions) from investors for new Ordinary Shares. The Company may also in the future issue new Ordinary Shares in consideration (in whole or part) for the acquisition of any investment that falls within the Company's investment policy.  Any issue of new Ordinary Shares pursuant to a Subsequent Placing and/or a Direct Subscription and/or as Consideration Shares is referred to in this announcement as a "Subsequent Issue". 

Any new Ordinary Shares issued pursuant to the Share Issuance Programme will be issued at a price not less than the Net Asset Value per Ordinary Share plus a premium to cover the expenses of such issue. The issue price will also take into consideration the prevailing share price per Ordinary Share.

The implementation of the Share Issuance Programme requires the production of a prospectus which the Company expects to publish in the near term.

The Directors are convening a General Meeting to seek the approval of Shareholders for the Proposals. The General Meeting will be held on 7 December 2020 at 10:30 a.m. The formal notice convening the General Meeting is set out at the end of the Circular.

The Share Issuance Programme

The Initial Issue

The Company is proposing to issue up to 60 million new Ordinary Shares pursuant to the Initial Issue, through the Initial Placing, Offer for Subscription and Intermediaries Offer. The issue price for the new Ordinary Shares issued pursuant to the Initial Issue will be determined by the Company and published in conjunction with the Prospectus. The actual number of Ordinary Shares to be issued pursuant to the Initial Issue will be notified by the Company via a Regulatory Information Service prior to Initial Admission.

The Initial Issue is conditional on the passing of the Initial Issue Resolutions.  If the Initial Issue Resolutions are passed at the General Meeting, the Company will be permitted to issue up to 60 million Ordinary Shares (representing approximately 72 per cent. of the issued share capital of the Company as at the date of the Circular) to investors without first having to offer them, pro rata, to existing Shareholders.

The authorities conferred by the Initial Issue Resolutions, if passed, will lapse immediately following Initial Admission.

Subsequent Issues

Following the Initial Issue, the Directors intend to implement the Placing Programme to raise capital for further investment.

In addition, the Company may seek to raise capital through direct subscriptions from investors with the Company for new Ordinary Shares, as it did with the recent issue of Ordinary Shares to Eneos Corporation (formerly known as JXTG Nippon Oil & Energy Corporation).

The Company may also seek to issue new Ordinary Shares in consideration (in whole or part) for the acquisition of any investment that falls within the Company's investment policy. The Company recently issued new Ordinary Shares in part consideration for the acquisition of the Anesco Assets.

The Directors are seeking authority at the General Meeting to issue, following the Initial Issue, up to 250 million Ordinary Shares pursuant to the Subsequent Issues (less the number of Ordinary Shares issued pursuant to the Initial Issue), without having to first offer those Ordinary Shares to existing Shareholders.

The programme of Subsequent Issues requires the approval of Shareholders to grant the Directors authority to allot the Ordinary Shares and also to disapply statutory pre-emption rights, and is therefore conditional on the passing of the Subsequent Issue Resolutions. The Directors already have Shareholder authority remaining to issue up to 29.9 million Ordinary Shares to NTMA pursuant to the Subscription Agreement. Pursuant to a resolution passed at a general meeting held on 14 August 2019, the Directors were authorised to issue up to 40.0 million Ordinary Shares to NTMA pursuant to the Subscription Agreement. As at the date of the Circular, 10.1 million Ordinary Shares have already been issued to NTMA pursuant to that authority.

If the Subsequent Issue Resolutions are passed, the Company will be permitted to issue up to 250 million Ordinary Shares pursuant to the Subsequent Issues (less the number of Ordinary Shares issued pursuant to the Initial Issue), in addition to any Ordinary Shares issued pursuant to any NTMA Subscription, (representing approximately 298 per cent. of the issued share capital of the Company as at the date of the Circular) to investors without first having to offer them, pro rata, to existing Shareholders.

The issue price for any new Ordinary Shares to be issued pursuant to a Subsequent Issue will be determined by the Company and will (save in the case of any new Ordinary Shares to be issued pursuant to a NTMA Subscription) be not less than the prevailing Net Asset Value per Ordinary Share at the time of issue plus a premium to cover the expenses of such issue.

The authorities conferred by the Subsequent Issue Resolutions, if passed, will lapse at the annual general meeting of the Company to be held in 2021.

Costs of the Proposals

The Ordinary Shares being issued pursuant to the Initial Issue will be issued at a price not less than the last published NAV per Ordinary Share at the time of issue, together with a premium intended to cover the costs and expenses of the Initial Issue. The issue price will also take into consideration the prevailing share price per Ordinary Share.

The costs and expenses of each Subsequent Placing or Direct Subscription will depend on subscriptions received but it is expected that these costs and expenses will be covered by issuing Ordinary Shares at a premium to the NAV per Ordinary Share at the time of issue.

Benefits of the Proposals

The Directors believe that the Proposals will have the following benefits for Shareholders:

• the Company will be able to raise additional funds in a timely manner to enable it to take advantage of opportunities to make further investments in accordance with its investment policy;
• the Company may increase diversification of its portfolio assets as raising additional funds should enable it to take advantage of a diversified pipeline of investment opportunities;
• the market capitalisation of the Company will increase, helping to make the Company attractive to a wider investor base, including to those investors who have expressed a preference for investing in larger investment trusts;
• a greater number of Ordinary Shares in issue should improve liquidity in the secondary market for the Ordinary Shares and make the Ordinary Shares more attractive to a wider range of investors; and
• the Company's fixed running costs will be spread across a larger equity capital base, which should reduce the level of ongoing expenses per Ordinary Share.

Considerations associated with the Proposals

Shareholders should have regard to the following when considering the Proposals:

• the Share Issuance Programme is not being made on a pre-emptive basis. Shareholders who do not, or cannot, participate in any issue under the Share Issuance Programme for an amount at least pro rata to their existing holding will have their percentage holding diluted;
• the issue price of the new Ordinary Shares to be issued on a non-pre-emptive basis pursuant to the Share Issuance Programme cannot be lower than the Net Asset Value per Ordinary Share at the time of issue. The issue price will be calculated by reference to the latest published Net Asset Value per Ordinary Share. Where the issue price is calculated by reference to the unaudited Net Asset Value per Ordinary Share, such Net Asset Value per Ordinary Share is determined on the basis of the information available to the Company at the time and may be subject to subsequent revisions. Accordingly, there is a risk that, had such issue price been calculated by reference to information that emerged after the date of issue of the relevant shares, it could have been greater or lesser than the issue price actually paid by the investors. If such issue price should have been less than the issue price actually paid, investors will have borne a greater premium than intended. If the issue price should have been greater than the issue price actually paid, investors will have paid less than intended and, in certain circumstances, the Net Asset Value of the existing Ordinary Shares may have been diluted;
• there can be no guarantee that the Company will ultimately be able to invest in any new energy storage projects on satisfactory terms, or at all; and
• Shareholders should be aware that the past performance of the Company or of the Investment Manager is not necessarily indicative of likely future performance.

Recommendation

The Board considers that the Proposals are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends 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 139,996 Ordinary Shares in aggregate (representing approximately 0.2 per cent. of the issued share capital of the Company as at the date of the Circular).

The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.

The Circular will shortly be available on the Company's website (www.gsenergystoragefund.com), subject to certain restrictions, for inspection at the Company's registered office at The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF and at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Terms not otherwise defined in this announcement have the meanings given to them in the Circular.

For further information:

Media enquiries

JTC (UK) Limited, Company Secretary Tel: +44 (0) 20 7409 0181

Notes to Editors

About Gore Street Energy Storage Fund plc

Gore Street is London's first listed energy storage fund and seeks to provide Shareholders with a significant opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders. 

The Company targets an annual dividend of 7.0% of NAV per Ordinary Share in each financial year, subject to a minimum target of 7.0 pence per Ordinary Share. Dividends are paid quarterly.

https://www.gsenergystoragefund.com