Gore Street Energy Storage Share Discussion Threads

[rambutan2] 21/12/2023 16:22

Not checked, but I'd expect that the company can't issue new stock below nav, without some sort of shareholder approval. Or if they did, there would be uproar from the insti holders. That is the excepted practice across the investment trust universe ie don't issue below nav, except in dire circumstances.

[scruff1] 21/12/2023 13:36

Well they are all ideas. Lots of possiblies and maybes though. Clarity is always appreciated.

[cc2014] 21/12/2023 10:33

Japanese companies have a different perspective on business than us Europeans. It's cultural.

They like to build partnerships and relationships throughout the supply chain and often hold investments in both their supplies and customers. It creates more alignment of common goals, more stability of revenues and profits.


I think this investments is nothing more than this. Sure, they could have gone and bought the shares in the market and probably paid about 100p but then Gore Street wouldn't have had the cash which has a benefit to them. The cash will get spent on battery installations and may well flow back to Nidec in the long run if not through GSF but perhaps through the new Japanese grid storage fund which Gore Street have been appointed fund manager for.

[spectoacc] 21/12/2023 08:49

How would they buy c.15m shares in the market at 75p, and why would the co issue them a stake at anything other than the reported NAV.

So rather than the price, guess the question is "why take a stake at all". Good for us shareholders tho.

[scruff1] 21/12/2023 08:46

waterloo
Im not reacting at all - yet. But why do you think they bought 78p shares at 120+p. Would you? Something hasnt been explained to my satisfaction at least

[fordtin] 21/12/2023 08:38

Recognition of the need for battery storage, or signs of government desperation to meet unrealistic taegets?

"
British firms, led by renewable energy firm 3ti, will also study how electric vehicles could offer a solution to mitigate low supply from UK power stations.

Through the ‘V2X FastHub’ demonstration, itself backed by £1.3 million in public funding, the companies will aim to prove electric vehicles worth as assets for the energy grid.

“Connected vehicles will be teamed together to act as virtual power and energy storage facilities,” 3ti chief technical officer explained, “with each car releasing and replenishing its stored energy according to user preferences and grid demand”.
"

[waterloo01] 20/12/2023 22:36

You are way over reacting imo. They have worked with them on the two most recent UK projects and are now contracted on the key us roll-out. All without this status of buying a stake at nav. Their expansion plans are limited as gore. Maybe less so as they expand and take on risk in Japan, but not gore issue.

[scruff1] 20/12/2023 20:07

Maybe marks. But whatever the deal it seems a bit odd and I cant quite get my head around it. Like i say if I was thinking of bidding I now wouldnt bother so possibly it has a bit of a stench. Hope not or Im out I think

[marksp2011] 20/12/2023 16:36

What they bought was the right to match anyone else's bid IE they can always winBut noone will bid keenly or bother too much as they know nidec will win ...end result is everyone puts in a pricey bid and nidec matches itIt is a very stupid procurement strategy that I see quite often. We still bid as the matching agreement is fixed term but we don't spend much time on it and we go with a very high margin

[scruff1] 20/12/2023 13:39

I topped up a couple o weeks ago and am happy enough and a tad ambivalent to this. Seems a bit odd buying something for 120 odd when could have had them for 70 odd so I guess they must be getting something out of the deal thats something more than an invitation to bid. If I was another co. thinking about it I wouldnt bother. So far management have been ok so will will keep the faith - and my eyes open

[18bt] 20/12/2023 11:12

Just topped up - I see the NIDEC deal as very positive - real incentives to get quality and timing right. UK 15 year gilts below 4% now so any project debt will be a lot cheaper in the UK as well as the effect on discount rates.

[melody9999] 20/12/2023 09:50

I see things more positively.

NIDEC have proved their quality on previous jobs - therefore they are likely to be GSF preferred choice in any case. Lower risk. So I am not sure GSF are conceding anything.
The 2 companies clearly work well together and this is demonstrated by the relationship becoming closer and NIDEC taking an interest.

I read NIDEC is the world's leading electric motor manufacturer, comprised of 340 group companies and 100,000 employees. Could GSF be the 341st sometime in the future?

[scruff1] 19/12/2023 13:56

in return Nidec will be able to participate in future competitive bids.

Doesnt the govt invite bidders to compete before awarding its contracts to Capita or its mates

[cc2014] 19/12/2023 13:04

In terms of a £550m Trust it's not really material.

[mylands] 19/12/2023 12:57

Looks like the market is underwhelmed by this move.

[mirandaj] 19/12/2023 10:29

KYOTO, Japan--(BUSINESS WIRE)--Nidec Corporation (TOKYO: 6594; OTC US: NJDCY) (the “Company”; or “Nidec”) has announced that we will complete an investment of 15.8 million GBP in Gore Street Energy Storage Fund PLC (“GSF”), an investment trust fund that operates an energy storage system business, through the Company’s subsidiary, Nidec Motor Corporation (“NMC”), on December 19, 2023 (US time).

1. Fund Profile
(1)

Company name

Gore Street Energy Storage Fund PLC

(2)

Listing

London Stock Exchange

(3)

Headquarters

London

(4)

Foundation

2018

(5)

Business manager

CEO Alex O'Cinneide
CFO/CIO Suminori Arima

(6)

Business content

Distribution of investment returns obtained from the operation of energy storage systems

(7)

Operational portfolio

UK 40%, Republic of Ireland 40%, U.S. 10%, Germany 10%

(8)

Total assets

543.3 million GBP as of September 30, 2023

(9)

Operational capacity

371.5 MW as of December, 2023

2. Purpose of the Investment

By forming a strategic partnership in the rapidly-growing energy storage system market with GSF, an existing customer of ours, Nidec shall be guaranteed participation in the bidding process for GSF’s future battery energy storage systems. This pipeline will include 360 MW of projects which GSF has already announced over the next five years. Nidec has a significant presence in the European BESS market with 2,725 MW installed as of the first half of fiscal year 2023, and is planning to expand its business outside of Europe. GSF is also strengthening its portfolio, targeting markets around the world outside of its current Europe-oriented portfolio, aligning with our strategy.

3. Effect on Financial Performance for the Current and Next Fiscal Year

The transaction is expected to have no significant impact on the Company’s consolidated financial performance for this fiscal year ending March 31, 2024. If necessary, the Company will make additional disclosure on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.

Cautionary Statement Concerning Forward-Looking Information

This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the planned transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies, whether and when required regulatory approvals are obtained, other risks relating to the successful consummation of the planned transaction, and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.

Contacts
Masahiro Nagayasu
General Manager
Investor Relations
[phone]
[e-mail]


NIDEC CORPORATION
TOKYO:6594
More NewsRSS feed for Nidec Corporation
Contacts
Masahiro Nagayasu
General Manager
Investor Relations
[phone]
[e-mail]

[someuwin] 19/12/2023 10:06

Shore Capital

Gore Street Energy Storage+

Strategic partner invests c£16m at NAV

GSF has appointed Nidec Motor Corporation (“Nidec”) as the EPC contractor for Dogfish, its 75MW Texas project. As part of the strategic partnership with Nidec, Nidec will subscribe for 14m new ordinary shares at NAV, raising gross proceeds of £15.8m for GSF. Under the terms of the agreement, Nidec will be entitled to participate in future competitive bids for GSF’s qualifying EPC contracts. This yet again demonstrates GSF’s innovative approach to funding its projects, maximizing shareholder returns whilst also reinforcing our view that the current share price, trading at a 25% discount to NAV, materially undervalues GSF’s growing and increasingly diverse portfolio of highly cash-generative assets.

Nidec awarded EPC contract for Dogfish: Nidec (TYO: 6594) is a leading electric motor manufacturer and a trusted partner in the energy storage space. The contracts include the EPC agreements and O&M contracts, including warranties for availability and energy capacity. Dogfish will initially be built as a one-hour duration system, with the optionality to retrofit a two-hour system if the revenues justify the higher capex. Once operational (target energisation by the end of CY24), Dogfish will be able to participate in ERCOT’s ancillary services, including RRS and ECRS as well as wholesale trading. In the six months to 30 September 2023, GSF’s Texas assets averaged £39/MW/hr vs the £7.54/MW/h achieved in GB, thanks to several heatwaves and the highly lucrative ECRS service. GSF’s US portfolio is expected to reach 305MW by the end of CY24, taking its US exposure to 38% of operational capacity.

Investment at NAV reinforces long-term growth opportunity: As part of the strategic partnership, Nidec will subscribe for 14m new ordinary shares at NAV (112.9p per share), generating gross proceeds of £15.8m. The shares will be subject to a six-month lock-up, after which Nidec will be able to dispose of up to 50% of its shares and any remaining balance after twelve months from admission. This builds on GSF’s relationship with Nidec, who was previously appointed as the EPC contractor for Ferrymuir and Stony. Under the agreement, Nidec will, for a period of five years following admission, be entitled to participate in upcoming competitive bids for EPC contracts in respect of qualifying projects with GSF. Nidec will also be guaranteed participation in the second stage of the process, providing they match/enhance the terms offered by other contenders.

Innovative funding solutions should enhance project returns: A similar strategy was adopted at IPO, when NEC ES, then a leader in the utility-scale energy storage market (since acquired by LG Energy Solutions), acted as a cornerstone investor, under the agreement that GSF would invest in projects that involved NEC ES providing a supply of products, equipment and/or services within 18 months from admission. With GSF’s shares now trading at a 25% discount, Nidec’s investment at NAV should act as a strong validation of GSF’s NAV from a strategic partner. It will also help reduce the debt (albeit modestly) required to construct GSF’s pipeline at a time when its peers’ rising levels of debt are compromising project returns, just as GB’s ancillary services market reaches saturation (GSF had £75m cash, no company-level debt as of 30 Sept 2023). Today’s news also follows the $60m project level, non-recourse funding GSF secured for its 200MW California project. Yet again management has demonstrated its ability to utilise innovative funding solutions to construct its rapidly growing portfolio of geographically diverse cash generative assets, whilst maximizing shareholder returns.

[marksp2011] 19/12/2023 10:01

This is a really stupid move

"Under the terms of this strategic partnership, Nidec will, for a period of five years following Admission, be entitled to participate in upcoming competitive bids for EPC contracts in respect of qualifying projects with the Company. Additionally, Nidec shall be guaranteed participation in the second stage of the process on the proviso that they can either match or enhance the terms offered by other contenders in the strictly competitive process."

I have seen this procurement gem on a number of different contracts and the results are always the same.

Assume you are a bidder on this "strictly competitive process"

OK, so what OI am being asked to do is invest money in a sales pursuit and then, if I win, my pricing will be given to their mates to see if they can match or better it. So my chances of winning on a decent margin are nil therefore ..."No bid"

Why would anyone invest money in a bid they can't win and, run the risk that their market positioning will be shared with a competitor.

The end of this process is that those who do bid, don't try hard and the overall cost that the insider needs to achieve to be competitive rises. It is a model that leads to highest cost not lowest.

This clause is either a deliberate decision by the managers thatmay benefit them but not GSF or, a sign that they should leave procurement to those who know what they are doing and stick to battery tech.

I have a sizeable holding in these...looks like a switch to GRID may be a good idea

What Nidec has done is bought a future global revenue guarantee. Great for them

[lord gnome] 19/12/2023 09:37

Delighted to see Nidec paying NAV for the new shares. Must say something about the quality of the assets. That's a pretty decent investment to make.

[cocopah] 19/12/2023 08:43

Interesting development. I hope a convincing rationale is communicated soon because the market doesn’t like uncertainty.

Why an ‘investor̵7; would pay a premium on the share price is THE question (I don’t buy that it’s about the right to be allowed to quote on future contracts).

[scruff1] 19/12/2023 08:12

Same as any placing really though they are usually at a discount not sure why they would be prepared to pay so much more than the then current share price of around 78p. Maybe someone can explain.
Either way as you say its a real act of faith. Lets see what the market thinks - seems happy enough thus far

[melody9999] 19/12/2023 08:10

A company that knows GSF probably better than all of us has thrown in £15M at 112.9p. Must have been part of the deal to win the EPC contract, as otherwise they could have just bought in the market?

Nice work by GSF to leverage this?

[fordtin] 19/12/2023 08:05

Struggled to get my head round it, but think I've finally figured it out. It increases NAV by £15.8m without affecting NAV per share.

[spectoacc] 19/12/2023 08:03

Ha yes, maybe - albeit good for existing shareholders as it's £15.8m cash to the balance sheet.