N Ireland Storage Developer Admits Cash Squeeze

UK-listed InfraStrata said May 22 it is seeking any non-binding offers with regard to its as yet undeveloped Islandmagee gas storage project in Northern Ireland, saying that the company may run out of cash by August.

Last August the company said it was hoping for a final investment decision in 2017 on the £300mn ($390mn) project north of Belfast which would have working gas storage capacity of 0.5bn m³ ; it had pointed to problems at Centrica’s Rough facility, and demand for Irish gas storage, as reasons to invest.

Now it said its current cash position stands at £175,000 and that, on current forecasts, the remaining cash balance provides working capital only until early August 2017.  

To make matters worse, two shareholders claiming to hold 5.1% of voting rights in InfraStrata have asked for the appointment of two directors to its board and the removal of all current directors, the firm acknowledged. InfraStrata intends to convene the requested general meeting of shareholders “in due course” but is seeking to understand the two shareholders’ plans and strategy for the company.

Islandmagee test site (Photo credit: InfraStrata)

InfraStrata said an ongoing “wide-ranging” strategic review may include options, such as a subscription for the company's securities by a third party or a farmdown or disposal of the gas storage asset.

Directors are seeking any non-binding offers, which may be in the form either of a £2.2mn investment in InfraStrata to complete the entire front-end engineering and design (Feed) and commercialisation work, or a proposed acquisition of InfraStrata's 90% interest in the Islandmagee project subject to the approval of the latter’s 10% partner, state-owned Mutual Energy or a corporate transaction involving any or all InfraStrata subsidiaries. It said a dataroom is available for interested parties. It noted that a €1.6mn EU grant for the Feed will need to be returned if it is not completed.

Mark Smedley