THE share price of Helius Energy has plunged by nearly 30 per cent after a proposed industrial partner rebuffed the chance to invest in and assume an operational role in the company's £380 million renewable energy project in Avonmouth, south west England.

The development is a major blow to Helius, which hoped the unnamed company would attract other equity partners to invest in the biomass plant if it took a minority stake.

It comes shortly after investors, led by Scottish seafood mogul Alastair Salvesen and including entrepreneur Angus MacDonald, responded to a call by the board for short-term working capital.

The Scottish investors contributed heavily to the £874,334 raised by the firm from existing shareholders, before expenses, under the limits of a pre-emptive offer earlier this month. The injection secured its funding position until November.

Helius, which has enlisted the Macquarie Group to recruit equity partners for Avonmouth, is now exploring how to maximise value from the proposed 100 megawatt biomass fuelled energy plant, located at the port of Bristol, under different financial structures.

It also said it would consider how best to generate value in its wider portfolio, including the Helius CoRDe plant in Rothes, Speyside, which converts the by-products from whisky distilling into electricity and liquid animal feed. Helius developed and operates the plant under a joint venture with the Combination of Rothes Distillers (CoRD) and Rabobank.

However, Helius insisted it would not consider or solicit bids for the company. Helius said: "In the event that the company is unable to secure financing for the Avonmouth project on suitable terms, or at all, in that timescale it will be reliant on realising value from its projects in order to meet its liabilities as they fall due."

Helius is seeking to raise £380m to construct a 100 megawatt biomass plant at Avonmouth. It had previously anticipated raising £155m from equity investors, with the remainder provided by senior debt. The company is eligible for a government-backed loan guarantee for a proportion of the scheme's senior debt. It expects to create 450 full-time jobs during construction, with 40 staff then taken on longer term once the plant is operational.

Mr Salvesen and Mr MacDonald upped their stakes in Helius to 26.4 per cent and 18 per cent under the limits of pre-emptive offer when they respectively invested £315,000 and £200,000 earlier this month.

Shares in Helius Energy closed down 2.37p at 5.63p.