Gresham House Energy shares up as announces long-term floor agreements

(Alliance News) - Gresham House Energy Storage Fund PLC on Thursday said it signed long-term floor pricing agreements with two counterparties, which it said was a "key milestone".

The London-based fund investing in utility-scale battery energy storage systems said it signed one agreement with Statkraft Markets GmbH, part of Oslo-based Statkraft AS.

Another deal is with Markel Bermuda Ltd, owned by Glen Allen, Virginia-based insurer Markel Group Inc.

Gresham House said the agreements are for 789 megawatt of projects. It added that once all the floor agreements are in force and the tolling agreements have expired, the 789 MW of its 1072 MW portfolio will secure a minimum annual contracted revenue of GBP35 million.

Both floor agreements have counterparties whose corporate groups have investment-grade status, Gresham House highlighted.

Gresham House Chair John Leggate said: "The floor agreements announced today with Statkraft, Europe's largest renewable generator, and with Markel, a leading specialty insurer respectively, represent delivery against key milestones of our three-year plan."

Gresham House said: "This is a key milestone for GRID. These floor agreements significantly improve the company's risk-adjusted return characteristics by protecting against low merchant revenue conditions below agreed floor levels, while maintaining exposure to upside merchant revenues that are expected to out-turn above those floor levels. They are key to unlocking advantageous terms for GRID's previously announced new debt facility, which is due to refinance existing debt facilities shortly, with the aim that future debt servicing [interest and principal repayments] will be fully covered from cashflow derived from contracted revenues."

Last week Tuesday, Gresham House announced it completed a third-party equity funding of GBP8.6 million in Glassenbury Battery Storage Ltd, which will be used to finance the augmentation of its combined 50 MW Glassenbury projects to 110 megawatt per hour.

Gresham House Chair Leggate said: "This unlocks an innovative path to raising equity funds at a project level for GB BESS and supports GRID's continued progress in delivering on our declared growth strategy. Most importantly this approach will create further value for our shareholders."

Gresham House shares rose 4.0% to 81.35 pence each on Thursday morning in London, giving it a market capitalisation of GBP463.1 million.

By Tom Budszus, Alliance News slot editor

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