InfraStrata raises £6m for acquisition of Harland & Wolff

Strategic infrastructure project investor InfraStrata announced a proposed placing of new ordinary shares by way of an accelerated bookbuild on Monday, to raise a minimum of £6m.

It also confirmed that it had entered into a conditional contract to purchase the principal assets of the former Harland and Wolff Heavy Industries and Harland and Wolff Group from administrator BDO NI.

The AIM-traded firm said it was seeking to raise a minimum of £6m before expenses through a placing of new ordinary shares by way of an accelerated bookbuild, at 0.3p per share, with the proceeds of the placing to be used to finance the acquisition of the principal assets of Harland & Wolff, repay and restructure the outstanding amounts under the bridging loan, progress the Islandmagee Gas Storage Project and for general working capital purposes.

Additionally, the company said it would draw down the second tranche of the debt facility provided by YA II PN and Riverfort Global Opportunities PCC under the bridge loan for £0.5m after costs and initial interest payment, in order to pay for the overheads of Harland & Wolff for the month of November.

“It is the intention of the board for the company to make an open offer to shareholders in order to give them an opportunity to subscribe for new ordinary shares at the same price as investors under the placing,” the board added in its statement.

“Following completion of the bookbuild the company will finalise the details of the open offer and prepare the necessary documentation and a further announcement will be made in due course.”

InfraStrata and its wholly-owned subsidiary InfraStrata Heavy Industries had entered into an acquisition agreement with Harland & Wolff and the administrators on 8 November, under which InfraStrata Heavy Industries had conditionally agreed to acquire the principal assets of Harland & Wolff for an aggregate cash consideration of £5.25m.

The company said the acquisition of the strategic Harland & Wolff assets enabled it to bring in-house a large part of the engineering and fabrication requirements for its Islandmagee Gas Storage Project and proposed FSRU Project.

By utilising the assets, the firm said it anticipated a “material reduction” in the capital cost of each of its projects, and a reduction in the construction timelines.

It confirmed all 70 employees of Harland & Wolff who did not opt for redundancy earlier in the year would be retained immediately following completion of the acquisition, adding that a new management team for the assets was expected to be in place by the first quarter of 2020, with plans to “significantly increase” the size of the workforce by several hundred over the next five years as InfraStrata progressed the development of the projects.

“Harland & Wolff's highly skilled workforce presents the company with an opportunity to create secondary revenue streams through the provision of services to the energy, maritime and defence sectors should such opportunities arise in future, which is in-line with the company's existing strategy of developing and monetising strategic infrastructure projects and physical asset life-cycle management,” the board said in its statement.

At 1603 GMT, shares in InfraStrata were down 5.88% at 0.32p.