A significant advisory firm, Institutional Shareholder Services (ISS), has urged stockholders of Corre Energy, a power storage developer listed in Dublin, to dismiss a proposal that would permit the company to increase its market value by up to 20% through a share sale, without offering shareholders the chance to take part initially. The Dublin-based firm’s shares plunged to a record low on Friday amid its ongoing quest for new investment.
According to ISS, the proposal to be discussed at Corre’s upcoming annual general meeting contradicts the standard investor protections in public organisations. Even though at its previous meeting, Corre secured the right to issue up to 10% of its share capital, in line with global practices, and used this to raise €2.12 million through share allotment with its founders and a durable investor last month—with an additional €640,000 from broadened offerings to other present investors.
The capital raise aims to stabilise Corre as it navigates discussions with parties interested in significantly investing in the firm, which only had €1.08 million in funds term-end last year. The firm’s overall drop over the previous year totals 91%, following a 4.3% drop, leading to a record low of 31 cents on Friday. Corre Energy, operated by an Irish squad from the Netherlands and led by CEO Keith McGrane, was listed on the Irish market in late 2021 and has a market cap of €23.3 million.
The energy industry’s overall dip, characterised by lowered energy costs and the burden of increased interest rates negatively affecting this capital-oriented sector, has partially contributed to the downturn. Nonetheless, concerns about Corre’s inadequacy to clearly define the financial specifics of its individual projects, for investors to gauge prospective profits, along with increasing worries about the outcome of major investment preservation discussions with third parties, have played a part. In dealing with these complexities, Corre enlisted the services of the investment bank, Rothschild & Co to guide them, after disclosing it had received investment overtures from several parties.
The Zuidwending (ZW1) project, under the umbrella of Corre, represents the peak of their ventures. Located within Groningen province, Netherlands, ZW1 is expected to support the grid with an electrical supply of up to 320MW. The project is anticipated to commence operations by the end of 2026.
There are several other significant schemes in the pipeline for Corre as well. These include a 320MW Green Hydrogen Hub initiative slated for Denmark, a further facility in the Netherlands (ZW2), and a strategy to put together three energy storage units powered by compressed air within caverns secured last year in Germany.
The firm ISS has put forth a recommendation that a ballot of disapproval be cast against Rune Eng’s prospective re-election to a weakened board. The board as proposed would exhibit a conspicuous lack of female representation. Frank Allen, Corre’s chairman, and formerly the CEO of Dublin’s Luas rail scheme, as well as chair of the Housing Finance Agency at present, has conveyed that he will not be standing for reappointment, according to ISS. In such a scenario, Mr Eng would be the sole executive director, contingent upon investors disregarding ISS’s counsel to vote against his re-election.