INFA.L Share News (INFA)

LONDON (Alliance News) - InfraStrata PLC, a company focused on development of strategic gas storage capacity, said on Wednesday it raised GBP925,000 through the issue of 385.4 million shares at a price of 0.24 pence per share..

Shares in InfraStrata opened 10% lower at 0.26 pence on Wednesday.

The company has also appointed SI Capital Limited as joint broker with immediate effect.

The majority of the net proceeds of the placing will be used to provide the funding required to enable the company to commence and complete the Front End Engineering Design for the project, which the Board considers to be a key step towards obtaining funding for construction of the project and its commercialisation.

Taking into account the remaining net proceeds of the placing and current cash reserves, the company is satisfied that it has sufficient working capital until the end of 2018.

Discussions continue with third parties who have expressed a commercial interest in this large scale and strategic infrastructure project. The board considers that commencement of the FEED is a key step forwards and will enable such discussions to be accelerated and advanced.

Of the funds raised, GBP285,963 is conditional on the approval of shareholders at a general meeting of the company to be convened to be held before the end of April 2018 of resolutions to provide authority to the directors to issue and allot further new ordinary shares otherwise than on a pre-emptive basis, further details of which are set out below.

Placing shares have a "1 for 2 warrant" attached to subscribe for further new ordinary shares at 0.48p per share exercisable within three years. Should all 192,708,333 warrants be exercised this would raise an additional GBP925,000 for the company.

Key contractors are in place to commence the FEED as soon as possible subject to execution of the formal contract documentation, the key terms of which remain materially unchanged to the details provided in an announcement of November 4, 2016. A further announcement will be made in respect of FEED commencement.

"I am extremely pleased that the company has achieved the important milestone announced today of securing the full funding required for the commencement and completion of the FEED. We believe that Islandmagee is a highly significant project particularly as gas storage capacity in the UK is significantly below the levels seen in other major European markets as exacerbated by the recent closure of Centrica's Rough facility, previously the UK's largest natural gas storage site," said Chief Executive Officer Adrian Pocock.

"InfraStrata now needs to accelerate the commencement of the FEED work and we will be communicating progress on this to the market, with commencement expected to be announced in the near future. In parallel, we are continuing discussions with potential storage customers, project level financing providers and other third parties who have expressed keen interest in this major infrastructure project. Further updates will be made in this regard as appropriate," Pocock added.