Corre Energy, the storage developer for renewable energy, has said it will need to “diversify its funding sources” but insisted the plunge in its share price will be reversed “over time”.
The Irish-run, but Dutch-based, business raised €2.76 million in share sales in the past week. Its efforts to raise cash are designed to tide the company over as it continues talks with third parties interested in making a significant “strategic investment” in a business that was down to just €1.08 million of cash at the end of last year.
Shares in the Dublin-listed company have fallen by more than 85 per cent over the past 12 months. This has been partly down to a slump across the wider green energy sector amid a decline in energy prices and the weight of higher interest rates on this capital-intensive sector.
In its annual report for 2023 published on Friday, chief financial officer Matthew Chrysler-Savage said that while the share price performance during 2023 was “not as strong as prior years”, this was in line with the overall trend in the sector and the wider economy.
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“We believe over time this trend will be reversed as the market understands the sector better and our projects develop to financial close, solidifying their financial value,” he added.
Corre Energy acknowledged in its annual report that because it is pursuing multiple projects across various jurisdictions, it “must accept a moderate to elevated risk that a given project will not be completed in line with agreed budget and timeline”.
We need to diversify our funding sources to ensure we have sufficient capital to fund the business over the next 12 months
— Corre Energy
The annual report shows Corre chief executive Keith McGrane’s remuneration package totalled €311,000 in the year, which was up from €307,000 the year before.
Darren Patrick Green, who was a director and the group’s largest shareholder before his resignation earlier this year, was paid a total of €328,000 in the year, down from €332,000.
On the group’s ability to continue as a going concern, the report pointed out it is still developing projects, is pre-revenue, and as such “requires significant future funding to continue its activities”.
“Whilst the group has been successful during 2023 in raising the required funding to ensure it maintains the development of projects and business development, we need to diversify our funding sources to ensure we have sufficient capital to fund the business over the next 12 months,” it said.
It said the equity investment in recent weeks “will be a sufficient bridge” for the working capital requirements of the company as it moves through the next stage in its strategic investment process, which is being managed by financial advisers Rothschild & Co.
“Whilst the outcome of this process is not currently certain in terms of size or structure the expectation from the business is to be able to announce progress on this within the forthcoming period to give clarity and confidence on the funding situation,” it added.
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