InfraStrata plc (INFA) has conditionally raised, in aggregate, up to £7.4 million (before expenses) by way of a placing of new 14,222,225 Ordinary Shares at a price of 45 pence per share to existing and new investors, as well as an Open Offer of up to 2,239,465 new Ordinary Shares to be issued to Qualifying Shareholders at a price of 45 pence per share.

Use of Proceeds

Since the announcement of the placing in July, the Company has made pleasing progress on its stated strategy, namely, to consolidate its position within the shipbuilding industry and build the forward contract order book.

In particular, the Harland & Wolff shipyard is now participating in much larger contracts and in August 2020, the Group completed the acquisition of substantially all the assets of Appledore Shipyard in North Devon, providing an opportunity to build a prominent presence in mainland UK, enabling ship and block building, ship repair and fabrication activities for the renewable industry and commercial markets.

Post this acquisition, the Company now believes that it can achieve a ‘dominant position at two distinct ends of the shipyard market’ being the lower end of the market at less than 119 metres of dock length, with H&W - Appledore and the upper end of the market, requiring dock lengths of 300+ metres with H&W - Belfast.

As the Group stands today, the Directors of INFA have identified a potential weighted pipeline of “£2 billion in contract opportunities between now and 2025” and believe there are near term revenue opportunities of £80.5 million and up to £825 million in the medium term. 

With the July fundraising having placed the Group in better financial standing, the Company continues to make wins with repeat clients on smaller contracts as confidence increases, whilst also seeing a trend of negotiating much larger potential contracts. In September 2020, the Company also achieved an EBITDA breakeven within the Cruise and Ferry market works operating within the drydocks.

The net proceeds from this Placing will further strengthen the Company's balance sheet and continue to enable it to tender for and win larger contracts

In addition, the proceeds will be used for capex including the acquisition of a robotic welding panel line and other yard refurbishment programmes in preparation for the potential award and subsequent execution of fabrication contracts

Placing Details

The Placing is being conducted in two tranches.

The First Placing will utilise the Company's existing authorities to allot shares and disapply pre-emption rights granted at its most recent general meeting.

The Second Placing and Open Offer will be subject to the approval of Shareholders to allot the Second Placing Shares and the Open Offer Shares at a General Meeting.

The Placing Shares will represent approximately 17.5% of the Enlarged Issued Share Capital following Second Admission (assuming full take up of the Open Offer). 

Open Offer Details

The Company is proposing to raise up to approximately £1.0 million before expenses under the Open Offer to Private investors.

Up to 2,239,465 new Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price, payable in full on acceptance. 

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:

Open Offer Share for every 29 Existing Ordinary Shares and so in proportion to the number of Existing Ordinary Shares held on the Record Date.

Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.

The Open Offer is conditional on the following:
1.    Resolution 1 being passed at the General Meeting;
2.    the Placing Agreement not being terminated prior to Second Admission and becoming unconditional in all respects; and
3.    Admission of the Open Offer Shares becoming effective on or before 8.00 a.m. on 14 January 2021 but not later than 29 January 2021.

General Meeting Details

A circular containing further details of the General Meeting to be held on 13 January 2021 is being posted to Shareholders shortly and will be available to view on the Company's website.

John Wood, CEO of InfraStrata commented: "This placing reinforces the faith that our shareholders have placed in us and we are delighted to see many of them either maintaining their positions and, in some instances, increasing them. We are also pleased to see new shareholders support our growth strategy. As we move into 2021, it will come with its own opportunities and challenges. This placing provides us the platform to go into the new year with a strengthened capital base and in preparation for the opportunities that will arise immediately post-Brexit. We look forward to a very active year of trading and with the firm intention of converting our short-run pipeline into monetised contracts."

Shares in INFA have performed exceptionally strongly since March this year, trading from 27p to opening today at 48p. The shares traded lower in early morning trade to 46.5p, still above  the placing price of 45p.

Reasons to Follow INFA 

InfraStrata is a London-listed firm focused on the development, commercialisation and operation of advanced high-value strategic infrastructure facilities across the globe.

Energy Stroage

The group holds a salt cavern gas storage project at Islandmagee in County Antrim, Northern Ireland is a pioneering low-cost fast cycle facility that it believes will provide ‘safe, secure and flexible gas storage that will in time serve the island of Ireland and the UK mainland.’

In May 2020, the company entered into a term sheet with West Face Long Term Opportunities Global Master L.P to acquire Meridian Holdings Co., under which sits the proposed Floating Storage and Regasification Unit Project (“FSRU Project”), located in North West England.

The Project will be the UK’s first to be developed and commercialised. Since more than 30% of the UK’s natural gas supplies arrive via LNG (liquified natural gas) cargoes, the FSRU is positioned to take advantage of LNG arriving in the UK seeking storage and regasification.
The estimated CAPEX for the FSRU Project will be circa £350m-£450m with further CAPEX optimisation planned through value engineering. The CAPEX for the FSRU Project is expected to be funded by putting together a consortium of partners at the project level. Estimated project revenues come to £80-£100mm annually with a 25-30 year project life.

Discussions with key partners have commenced with a consortium consisting of globally recognised companies involved in the development, construction, operations and commercialisation of regasification terminals worldwide will be formed in due course.

Shipbuilding

In August 2020, the Group completed the acquisition of substantially all the assets of Appledore Shipyard in North Devon, enabling the Company to compete from a ‘dominant position at two distinct ends of the shipyard market’ being the lower end of the market at less than 119 metres of dock length, with H&W - Appledore and the upper end of the market, requiring dock lengths of 300+ metres with H&W - Belfast.

The group signed a Letter of Intent (“Lol”) with Triumph Subsea Services to build two Windfarm Development Vessels ("WDV”) at a length of 200m and a beam of 35m.

The vessels will be built with diesel-electric hybrid engines that will eventually transition into hydrogen fuel cells, offering what management considers to be the ‘greenest’ solutions to wind farm developers.

The WDVs will be used for fixed and floating wind farm installations and sub-sea cable laying and providing marine services for offshore carbon capture and green hydrogen projects.

Significant Forward Pipeline

As the Group stands today, the Directors of INFA have identified a potential weighted pipeline of “£2 billion in contract opportunities between now and 2025” and believe there are near term revenue opportunities of £80.5 million and up to £825 million in the medium term.