InfraStrata has commenced a strategic review of its business plan, operational assets, development strategy, and its capital structure to maximise value for shareholders.
The company has also been in discussions with several parties to secure the remaining £2.2m funding needed to complete the entire Front End Engineering Design (FEED), as well as to carry out commercialisation work programme for the Islandmagee gas storage project.
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It has explored several sources of potential finance in debt and equity.
In its announcements on 27 February, 19 April and 4 May, the company stated that if it is not successful in its discussions with potential investors, it may need to use the remaining funds to look at the feasibility of other options, including divestment of the project or its assets.
In April, the company stated that following completion of the Concept Evaluation phase of the FEED, existing funding would only extend to the fourth quarter of this year to meet minimum corporate and project expenditure. Without funding, further work will not be undertaken to progress the FEED.
The directors of InfraStrata, therefore, considered it necessary to explore other options and have launched the strategic review.
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By GlobalDataThe company has used the net proceeds of the placement of approximately £740,000, completed on 3 March, to repay £200,000 on a loan from Baron Oil and complete the Concept Evaluation phase of the FEED for £350,000, as well as to meet management costs and make necessary payments with regard to the project.
The company currently has cash of £175,000, which will enable it to meet the expenditure for care and maintenance until the beginning of this year's fourth quarter. This cash, however, excludes €1.6m of funds received as EU grant, which is subject to restrictions on its use.
Among the strategic options may include a subscription for the company's securities by a third party or a farm down or divestment of the gas storage asset.
The company’s directors have sought any non-binding offers, which may include a £2.2m investment to complete FEED and commercialisation work programme; a proposed acquisition of InfraStrata's 90% stake in the project through its wholly owned subsidiary InfraStrata UK; a sale of the project asset owned by Islandmagee Storage subject to the approval of project partner, Mutual Energy; or a corporate transaction involving any subsidiaries of InfraStrata .
InfraStrata is entirely focused on gas storage and has its project located at Islandmagee, County Antrim, Northern Ireland.
