LONDON: Gresham House Plc, the specialist alternative asset manager, has sold its first material battery storage development project to Gresham House Energy Storage Fund for £32.8 million.
The 49MW battery-only project known as Red Scar, which is located on the Red Scar Business Park, by the Longridge Road and the M6 outside Preston, was sold for a total enterprise value of approximately £32.8 million and is one of the exclusive portfolio projects being developed by subsidiaries and associates of Gresham House for sale to GRID.
Gresham House, through its wholly owned subsidiary Gresham House Devco Limited and associate Noriker Power Limited, made £0.6 million equity and loan investments in the Project. This investment will make an initial net gain on sale of approximately £1.2 million, with deferred payments, conditional on performance, of approximately £0.4 million expected in twelve months’ time.
The investment in the Project is consistent with exceeding Gresham House’s 15% return on balance sheet capital threshold over the medium term. After this sale, Gresham House has an exposure of £3.4 million in the remaining battery storage development projects, which are in exclusivity with GRID and total over 100MW in size and expect to be sold during 2020.
Tony Dalwood, Chief Executive of Gresham House, said: “This is a good example of how Gresham House uses its balance sheet to align itself with its clients and funds that it manages or advises. We are targeting this area to generate long term shareholder value from strong and sustainable investments. However, future returns may be less certain in timing and may vary from this initial successful development.”