SHARES in Helius Energy have surged by nearly seven per cent after Scottish seafood magnate Alastair Salvesen signalled his commitment to boosting his majority stake.
The businessman is among several directors who have responded to a call from the board for short-term working capital. It follows a delay in the firm's bid to secure funding for a 100 megawatt biomass plant in Avonmouth, Bristol.
Helius said it intends to raise £874,334, before expenses, from existing shareholders within the pre-emption limits allowed by a resolution passed at its annual meeting in March.
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Mr Salvesen, chairman of Dawnfresh Seafoods and scion of the Salvesen shipping dynasty, has pledged to invest a further £315,000 into the renewable energy firm.
The purchase of an additional 4.5 million shares will take his stake in Helius, which developed and operates a biomass plant in Speyside under a joint venture with the Combination of Rothes Distillers (CoRD) and Rabobank, to 26.4 per cent.
Fellow Scottish entrepreneur Angus MacDonald has committed to investing a further £200,000 in Helius, lifting his stake to 18 per cent. The new ordinary shares will be allotted at a price of 7p per share, representing a discount of about 3.5 per cent on the close price of 7.25p on Friday.
The Helius board said the injection will secure its funding position until November, by which time it aims to have the finance in place for Avonmouth. Should the funding not be in place by then the company anticipates raising additional financing.
Helius expects the total capital cost of the Avonmouth project, including senior lender fees and interest incurred during construction, to be about £380 million. The board envisages about £155m will be raised by equity partners, with the balance being provided by senior debt.
Macquarie Group has kick-started the process of recruiting equity for the project, with Helius reporting "strong momentum with potential equity partners".
Helius said the CoRD project, which converts byproducts from whisky distilling into renewable energy and liquid animal feed, is performing well after its first year of commercial operation. It noted the plant experienced early reliability issues which led to higher-than-planned operating costs. And although the plan achieved higher electricity output than expected, it did so at lower-than-anticipated prices. Helius said the higher operating costs meant profits were lower than envisaged in the first year.
Chief executive Adrian Bowles said: "Completion of the first full year of commercial operation by our Rothes plant is an important milestone for the company.
"The operational improvements we have introduced during the year have further enhanced the high quality of the project."
Shares in Helius Energy closed up 0.5p at 7.75p.