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VSA CAPITAL MARKET MOVERS - redT energy, Placing and Strategic Review

VSA CAPITAL MARKET MOVERS - redT energy, Placing and Strategic Review

redT energy#: Placing & Strategic Review, 14/03/19

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redT energy#: Placing & Strategic Review

redT energy (LON:RED), an energy storage solutions company, has announced a Strategic Review to explore all options available to fund the business. To support this process the company has conditionally raised £940,000 at 2p with an associated Open Offer to raise up to a further £2.26m.

The Placing and Open Offer are conditional on shareholder approval at a General Meeting, which is expected to occur on 3 April 2019, and the fundraise is subject to a minimum of £1.5m being raised in aggregate across the Placing and Open Offer.

Several operational updates have also been announced:

  • CEO Scott McGregor will be stepping down from the Board of Directors but will remain with the business to run operations.
  • Non-Executive Director Neil O’Brien will move to Executive Chairman to lead the Strategic Review process, replacing Jeff Kenna, who will become a Non-Executive Director.
  • Major cost-cutting programme has been implemented with the average monthly cash spend moving below £0.5m a month.
  • A non-binding MoU has been signed for the sale of its US biogas management business for US$1m (expected to close in Q2 2019).
  • A purchase agreement has been signed for 72 tank units (c.5MWh) for a large UK grid project (delivery across 2019 and 2020) with a redesigned German grid project now submitted to potential financers for review. First Gen3 machine awaiting delivery to Anglian Water site. 32 Gen2 tank units delivered to sites in Australia, Thailand, Botswana and the UK since October 2018.
  • Heads of Terms partnership agreement signed with a major European energy company to offer a fully-financed, solar PV plus energy storage product to UK C&I customers, targeting the deployment of 100MW of solar PV and 60MWh of storage over the next three years.
  • Company has adopted a more conservatively weighted sales pipeline, which now totals £145m (from £188m in mid-December).

Research Coverage Suspended

Given the company has now entered a Strategic Review process, we have suspended our research coverage on the stock.

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