Gresham House Energy Storage

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO U.S. PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR THEIR RESPECTIVE TERRITORIES OR POSSESSIONS, OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO ISSUE OR SELL, OR ANY SOLICITATION OF ANY OFFER TO SUBSCRIBE OR PURCHASE, ANY INVESTMENTS IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

25 May 2022

Gresham House Energy Storage Fund plc

("GRID" or the "Company")

Proposed Placing

Gresham House Energy Storage Fund PLC, the UK's largest fund investing in utility-scale battery energy storage systems, is pleased to announce the first issue of new ordinary shares ("New Ordinary Shares") pursuant to a new share issuance programme (the "Share Issuance Programme") to be launched today (the "Initial Placing"). Under the Initial Placing, the Company intends to raise approximately £150 million through the issue of New Ordinary Shares at a Placing Price of 145p per New Ordinary Share (the "Placing Price").

The prospectus relating to the Share Issuance Programme ("Prospectus") is expected to be published shortly.

Highlights

·      Pipeline

o  The Company intends to build on its leading market share and significantly increase the size of its Portfolio by acquiring an existing pipeline of 747MW of battery energy storage system projects ("ESS Projects") in the UK and Ireland for which due diligence is well under way for 647MW of this capacity (the "Existing Pipeline").

o  Based on the IRRs of the pipeline projects, GRID expects a meaningful revaluation of projects, post-commissioning, at the prevailing discount rate (10.7% WADR as at 31 March 2022) which, in turn, is expected to be a positive driver of NAV growth over time.

o  Once, and assuming, the Existing Pipeline is fully commissioned, the Portfolio is expected to grow to 1,597MW of operational capacity.

o  The majority of the Existing Pipeline is expected to be financed by the net proceeds of the Initial Placing (the "Net Proceeds") and drawings under the Company's debt facilities. 

·      Strong relative performance

o  From the IPO in November 2018 to 31 March 2022, GRID delivered a share price total return of 64.1% compared with 22.0% for the FTSE All Share and a NAV total return of 58.8%.

o  As at 24 May 2022, GRID's share price total return from IPO had increased to 83.3% compared with 19.9% for the FTSE All Share.

o  GRID's last reported NAV as at 31 March 2022 was 131.89p per ordinary share.

o  The Manager expects GRID's 30 June 2022 NAV to be at the upper end of the 140-145p per ordinary share guidance range announced on 6 April 2022.

·      On 13 May 2022, the Company received shareholder approval to, amongst other approvals, allow it to acquire Ready to Build projects. These changes should help facilitate a migration to the premium segment of the London Stock Exchange in due course.

·      The Company has a dividend target of 7.0p per ordinary share for the financial year to 31 December 2022, paid quarterly, which represents a dividend yield of 4.8% at the Placing Price.[1]

·      Investors in the Initial Placing will be entitled to the dividend for the three-month period to 30 June 2022 (1.75p expected) to be declared in August 2022.

·      The Initial Placing is expected to close no later than 3.00 p.m. on 26 May 2022 (see further details below).

John Leggate CBE, Chair of Gresham House Energy Storage Fund plc said:

"The substantial growth of solar and wind power, backed by the strategic imperative of energy security and the zero-carbon energy transition, underpins our core investment strategy. Growing renewables deployment increases the pressure on power grids to deliver reliable power for which battery storage has the immediate capability and flexibility to achieve. The Gresham House team have delivered excellent performance, well ahead of our target returns, and have demonstrated their track record in impactfully deploying the equity we have raised to date."

Ben Guest, Lead Fund Manager and Head of Gresham House New Energy, commented:

"Power price volatility is a fundamental feature of grid-connected renewable energy power systems. We have designed our battery energy storage systems to effectively capture the growing trading opportunity as renewables generation increases. With our scale, disciplined cost management and performance of our assets, we have been able to deliver strong returns to date.  We plan to significantly increase GRID's Portfolio over the next two years by adding a further 10 projects totalling 747MW, including some of the industry's largest batteries to date. The proceeds from this Initial Placing will support that future growth and help the Company continue to drive strong returns for Shareholders."

Use of Proceeds 

The Company anticipates that the Net Proceeds of the Initial Placing and drawings under the Company's debt facilities will fund the majority of the Existing Pipeline. This pipeline (other than Shilton Lane) is exclusive to the Company and represents an attractive incremental addition to the existing Portfolio, which is diversified by asset and location, including the Republic of Ireland.

Details of the Existing Pipeline are as follows:

In addition to the Existing Pipeline, the Manager is assembling a New Pipeline both in Great Britain and the Overseas Jurisdictions. The most significant new opportunities are in Great Britain (4GW), Ireland (1GW), Spain (1.5GW), and Australia (c. 0.7GW). These opportunities have been directly originated or established through exclusive agreements with international developers.   

Further information

Jefferies International Limited ("Jefferies") is acting as sole global coordinator, bookrunner and financial adviser to the Company in connection with the Initial Placing and the Share Issuance Programme. Jefferies will today commence a bookbuild process in respect of the Initial Placing at the Placing Price. The Initial Placing will be non-pre-emptive pursuant to the terms set out in the Prospectus and is expected to close no later than 3.00 p.m. on 26 May 2022 but may be closed earlier or later at the absolute discretion of Jefferies and the Company. Details of the number of New Ordinary Shares to be issued pursuant to the Initial Placing will be determined by the Board (following consultation with Jefferies and the Manager) and will be announced as soon as practicable after the close of the Initial Placing.

Application will be made for the New Ordinary Shares to be admitted to trading on the Specialist Fund Segment of the London Stock Exchange's main market ("Admission"). Admission is expected to occur and dealings in the New Ordinary Shares is expected to commence at 8.00 a.m. on 31 May 2022.  

The New Ordinary Shares issued pursuant to the Initial Placing will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. For the avoidance of doubt, investors participating in the Initial Placing will be entitled to receive the next quarterly dividend declared by the Company relating to the quarter ending 30 June 2022 (1.75 pence expected) to be declared in August 2022. 

The Initial Placing may be scaled back by the Company for any reason, including where it is necessary to scale back allocations to ensure the Initial Placing proceeds align with the Company's post fundraise deployment targets.

By choosing to participate in the Initial Placing and by making an oral and legally binding offer to subscribe for New Ordinary Shares, investors will be deemed to have read and understood this Announcement and the Prospectus in their entirety and to be making such offer on the terms and subject to the conditions in the Prospectus, and to be providing the representations, warranties and acknowledgements contained therein. 

Share Issuance Programme

The Company is implementing a Share Issuance Programme to issue up to 400 million New Shares over a 12-month period, including for the avoidance of doubt any New Ordinary Shares issued as part of the Initial Placing. The relevant authorities for the Share Issuance Programme were granted at the General Meeting held on 13 May 2022.

A copy of the Prospectus, when published, will be submitted to the National Storage Mechanism and will shortly thereafter be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism as well as on the Company's website at https://greshamhouse.com/real-assets/new-energy-sustainable-infrastructure/gresham-house-energy-storage-fund-plc/. Full details of the Terms and Conditions of the Initial Placing will be made available in the Prospectus.

Expected timetable

The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Jefferies) bring forward or postpone the closing time and date for the Initial Placing. In the event that a date or time is changed, the Company will notify persons who have applied for New Ordinary Shares by post, by electronic mail or by the publication of a notice through a Regulatory Information Service.

References to all times are to London times unless otherwise stated.

Dealing codes

Unless otherwise defined, capitalised terms used in this announcement shall have the same meaning as set out in the Prospectus to be published on or around 25 May 2022. The information contained in this announcement may constitute inside information. The person responsible for the release of this announcement on behalf of the Company is JTC (UK) Limited.

For Further Information

About the Company and the Manager:

Gresham House Energy Storage Fund plc seeks to provide investors with an attractive and sustainable dividend over the long term by investing in a diversified portfolio of utility-scale battery energy storage systems (known as BESS) located in Great Britain and the Overseas Jurisdictions. In addition, the Company seeks to provide investors with the prospect of capital growth through the re-investment of net cash generated in excess of the target dividend in accordance with the Company's investment policy.

Gresham House Asset Management Limited is the FCA authorised operating business of Gresham House plc, a London Stock Exchange quoted specialist alternative asset manager. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

www.greshamhouse.com

Definition of utility-scale battery energy storage systems (BESS):

Utility-scale battery energy storage systems (BESS) are the enabling infrastructure that will support the continued growth of renewable energy sources such as wind and solar, essential to the UK's stated target to reduce carbon emissions. They store excess energy generated by renewable energy sources and then release that stored energy back into the grid during peak hours when there is increased demand.

DISCLAIMERS

This announcement which has been prepared by, and is the sole responsibility of, the Directors of the Company has been approved for the purposes of section 21 of the Financial Services and Markets Act 2000 by Gresham House Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority.

This announcement has been prepared for information purposes only.

This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for, any shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Copies of the prospectus will be available from: www.newenergy.greshamhouse.com/products/esf. 

This announcement is not an offer to sell or a solicitation of any offer to buy New Shares in the United States, Australia, Canada, the Republic of South Africa, Japan, or any Member State of the European Economic Area (other than the Republic of Ireland and the Netherlands), or any of their respective territories or possessions, or in any other jurisdiction where such offer or sale would be unlawful. No action has been taken by the Company or Jefferies that would permit an offering of any shares in the capital of the Company or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and Jefferies to inform themselves about, and to observe, such restrictions.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold, resold, transferred or delivered directly or indirectly in the United States, or to, or for the account or benefit of, U.S. Persons, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Ordinary Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the Ordinary Shares may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act. 

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the Company. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.

This announcement may not be used in making any investment decision in isolation. This announcement on its own does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment. This announcement does not constitute or form part of and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement or its completeness.

The information and opinions contained in this announcement are provided as at the date of the announcement and are subject to change without notice and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, the Manager, Jefferies or any of their affiliates or by any of their respective officers, employees or agents to update or revise publicly any of the statements contained herein. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness. The document has not been approved by any competent regulatory or supervisory authority.

Potential investors should be aware that any investment in Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person. Any data on past performance contained herein is no indication as to future performance and there can be no assurance that any targeted or projected returns will be achieved or that the Company will be able to implement its investment strategy or achieve its investment objectives. Any target returns published by the Company are targets only. There is no guarantee that any such returns can be achieved or can be continued if achieved, nor that the Company will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by the Company to be materially lower than the target returns of the Company.

The information in this announcement may include forward-looking statements, which are based on the current expectations, intentions and projections about future events and trends or other matters that are not historical facts and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereof) or other variations thereof or comparable terminology. These forward-looking statements, as well as those included in any related materials, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions about the Company and other factors, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur and actual results may differ materially from those expressed or implied by such forward looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. 

Jefferies International Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Jefferies or advice to any other person in relation to the matters contained herein. Neither Jefferies nor any of its directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for this announcement, its contents or otherwise in connection with it or any other information relating to the Company, whether written, oral or in a visual or electronic format.

Each of the Company, the Manager, Jefferies and their affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom.

No representation or warranty is given to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views contained herein are based on financial, economic, market and other conditions prevailing as at the date of this announcement. The information contained in this announcement will not be updated.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: PROD 3 of the FCA's Product Intervention and Product Governance Sourcebook (the "II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in  COBS 3.5 and 3.6 of the FCA's Conduct of Business Sourcebook, respectfully and (ii) eligible for distribution to retail investors through advised sales only and to professional clients and eligible counterparties through all distribution channels as are permitted by the Product Governance Requirements (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the New Shares may decline and investors could lose all or part of their investment; the New Shares offer no guaranteed income and no capital protection; and an investment in the New Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Initial Placing and the Share Issuance Programme.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA's Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Shares and determining appropriate distribution channels.

PRIIPS (as defined below)

ln accordance with the UK version of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products, as it forms part of the law of England and Wales by virtue of the European Union (Withdrawal) Act 2018, as amended, as further amended by UK legislation, from time to time ("PRIIPs") and its implementing and delegated acts (the "PRIIPs Regulation"), the Manager has prepared a key information document (the "KID") in respect of the New Shares. The KID is made available to "retail investors" prior to them making an investment decision in respect of the New Ordinary Shares at www.newenergy.greshamhouse.com/products/esf.

If you are distributing New Ordinary Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients".

The Manager is the only manufacturer of the Ordinary Shares for the purposes of the PRIIPs Regulation and none of Jefferies or the Company are manufacturers for these purposes. None of Jefferies or the Company makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the KID prepared by the Manager nor accepts any responsibility to update the contents of the KID in accordance with the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of New Ordinary Shares. Each of Jefferies and the Company and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information documents prepared by the Manager. Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed.