The Irish stock market, facing an alarming decline in public listings, is set to receive a boost from Budget 2025. This includes relief for initial public offering (IPO) expenses up to €1 million and a waiving of stamp duty on certain share transactions. However, these proposed solutions are unlikely to be a major game-changer.
Finance Minister Jack Chamber acknowledged the 231-year-old exchange in his budget speech, offering a glimmer of hope for a sector that has lost half of its listings, falling to 26 from its pre-financial crash numbers. In recent times, Euronext Dublin, the current moniker of the exchange, has experienced the highest rate of contraction of any western European market.
This is largely due to the proliferation of private equity-backed, public-to-private deals, which overshadow share listings, combined with leading companies like CRH, Flutter Entertainment and Smurfit WestRock migrating to Wall Street.
Over the past decade, the Irish IPO scene has run out of steam. Recent instances include the flotation of HealthBeacon in December 2021, which did little to inspire future IPOs. The medical technology firm was subsequently taken over in a rescue deal earlier this year by a U.S. distribution partner, Hamilton Beach Brands.
Corre Energy, which joined the Iseq in September 2021, also fell victim to premature IPO. Despite boasting innovative product offerings, both companies lacked proper investment backing and would have benefitted from additional private-market funding rounds before going public.
With Corre’s share value plummeting by 90% this year, reducing the company’s market worth to just over €16 million, it’s evident that the company’s problems run deeper than the general downturn in the global clean energy sector. This tension is evident in the S&P Global Clean Energy stocks index’s 9% decline over the same period. This downward trend reflects the struggles of this capital-intensive sector grappling with increased interest rates and the lingering aftermath of green energy stocks’ pandemic-induced spike.
Three years ago, the company Corre went public with its flagship Zuidwending (ZW1) venture positioned as Europe’s premier large-scale Compressed Air Energy Storage (CAES) facility. Expected to generate 320 megawatts (MW) of power, continually, for up to three and a half days, this project was projected to go live in 2025 or 2026. Unfortunately, the company hasn’t provided its investors with detailed forecasts about what returns they could expect from this facility.
However, Corre had more recently intended ZW1 to be operational by the close of 2026. This week they revealed that regulatory permit hurdles have delayed the final investment commitment to the project until after 2027, with the operations potentially not beginning until the decade’s conclusion.
Corre’s 320MW Green Hydrogen Hub in Denmark, another crucial project highlighted in its initial public offering (IPO) paperwork, has encountered sourcing issues for sufficient cavern space, sparking concerns over its financial feasibility.
In a positive light, a recent joint venture for a 320MW battery energy storage project in the Netherlands could connect to the grid by mid-2027. Although batteries are a more tested storage method compared to CAES, they come at a higher expense and have shorter lifespans. Given these circumstances, launching an alternate project sooner is a priority, even if it deviates from the company’s initial investor proposition.
The need for a substantial financial boost has been looming for Corre, crucial in securing optimal deals as they approach financial investment decisions for their projects. With a meagre cash balance of less than €1.1 million at the end of the previous year, Corre engaged Rothschild in April to attract a substantial strategic investor.
As these financial issues have worn on, Corre’s share value has suffered. A €2.58 million temporary cash injection from investors in July was then followed by a desperate measure of obtaining a €5 million emergency loan just five weeks ago.
The UK’s tax governing body recently associated Darren Patrick-Green, a founding director who exited in February, with a tax evasion scheme, a claim he vehemently denies. Following this, in August, it was disclosed that a sizeable amount of Corre shares had been pledged by a holding company to cover loans. These issues were brought to light during due diligence conducted by investors brought in by Rothschild. However, the negotiations hit a roadblock, and they only resumed recently. This week, Corre accepted that any potential deal may only materialise around 2025.
Key investors behind the newest rescue loan – North Ireland’s property tycoon Frank Boyd, his son, Brendan, and Nick Furlong, an investor favouring complexity of the Iseq – have taken measures to appoint their chosen nominees to the board. There’s also a plan to appoint an executive to work in tandem with Corre’s founding CEO, Keith McGrane, which is being discussed in an extraordinary general meeting taking place next Monday. However, there are slim chances of Corre still being listed on the Iseq in the next half-year.