Tuesday 16th August 2022

MeyGen owner Simec Atlantis shares drop on fundraising

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Shares in Scottish renewables firm Simec Atlantis Energy (SAE) have plunged after it raised £2.6million from investors in a placing announced last night.

SAE, which operates the MeyGen tidal array in the Pentland Firth, said it it raised the funds through the issue of 104,000,000 new ordinary shares at 2.5 pence per share.

The cash will be used to fund working capital and the delivery of “first-of-a-kind and world-leading projects”, SAE said.

Markets reacted to the AIM-listed company’s (LSE: SAE – 4.85p) move with a 45% collapse in the value of its shares in early trading.

The move comes after the firm posted pre-tax losses of £10.7 million for the six months to June 30 last night.

It marks a deterioration in trading from losses of £6.2m a year earlier.

SAE said there were a number of factors behind the wider losses.

Partly driven by MeyGen outages

The Edinburgh firm added: “There was reduced revenue performance from the MeyGen project as a result of significant outages in three of its four turbines, which necessitated retrieval for onshore repair.

“2021 results for the tidal turbine and engineering services division have seen a drop-off following a very strong 2020, which benefitted from revenues on the phase one Japanese tidal project.

“GHR (SAE’s hydro division) continued to deliver stable growth.”

Earlier this year SAE announced it had successfully installed Highland-built tidal turbine and generation equipment in Japan.

It is now producing clean electricity between the islands of Naru and Hisaka in the Goto island chain.

The SAE-designed and manufactured AR500 system was assembled and tested in nine weeks at Global Energy Group’s Nigg Energy Park on the Cromarty Firth.

SAE’s first half revenue came in at £5.2 million, down from nearly £8m a year ago.

In July, SAE announced its largest shareholder – GFG Alliance, the troubled group controlled by industrialist Sanjeev Gupta – had wrested back control of the business from the clutches of receivers.

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