Gas storage specialist InfraStrata (AIM: INFA) has launched a review of strategic options as it chases capital to progress its Islandmagee project.
The company is short of around £2.2million of funding to complete the entire Front End Engineering Design (FEED) and a commercialisation work programme for the gas storage project north of Belfast.
The company previously said that despite exploring many sources of finance including debt and equity it may have to “explore other options” – including a sale of the Project and/or its assets.
InfraStrata said the UK gas storage market is in a state of “significant” change with the well documented problems at the largest facility, Centrica’s Rough. T
The firm added in a statement: “The directors believe these changes may increase the long-term strategic value of the Project and control of the asset may therefore be more attractive to market participants with balance sheet resources to take the development forward into construction.”
The firm is also facing a shareholder revolt after two parties claiming to hold 5.1% of the voting rights proposed the axing of the current board and the appointment of two new directors.
The company said: “The exercise has been a significant distraction for the board and as well as incurring time and costs for the Company, has provided uncertainty at a critical time in discussions with potential investors and a deterrent to other funding options.
“The directors are seeking to engage with the underlying shareholders who requisitioned the general meeting to understand their plans and strategy for InfraStrata.”
The company’s current cash position stands at £175,000, which will allow for expenditure on a care and maintenance basis until the beginning of Q4 2017.
InfraStrata said that the project remains a “viable option” if funding was sourced/
Failing, that other options include a subscription for the company’s securities by a third party or a farm down or disposal of the gas storage asset.