IRISH ENERGY group Kedco is set to float on the London Stock Exchange today in a move valuing it at almost €35 million.
Cork-based Kedco, which has operations in Ireland and Britain, plans to launch on London's Alternative Investment Market (AIM) with an admission price of 17.5 cent a share.
The price values the 199.4 million-plus Kedco issued shares at €34.9 million. The shares will be admitted to the market a 8am this morning.
According to chief executive Donal Buckley, the company will follow the flotation in the new year with a further share issue designed to raise more capital.
Kedco provides technology that converts various forms of waste to energy and then to electricity, which can be sold on to national power-distribution systems.
The company takes food and wood waste, collectively known as "brown bag waste" and converts both to energy. It operates by forming joint ventures with medium-sized waste management companies and local authorities, whose waste it takes and converts.
It has 25 such projects under way: 16 in Britain and nine in Ireland. All the projects are joint ventures, split 50-50 with each of Kedco's partners. Mr Buckley said at the weekend that Kedco decided to float on the London market as most of its existing and potential customers are British based.
"More and more of our business is coming from the UK, and our customers are more comfortable with a London listing." He said the London market is bigger than Dublin and ultimately gives Kedco access to more capital and investors. He did not rule out listing on Dublin's enterprise exchange, the IEX, at a later date. The flotation is designed to position the company to raise cash to take on future projects and bring it to the next level of development.
He said British government incentives for converting waste to energy are bigger than those on offer in the Republic. Britain guarantees a tariff of 18 cent a unit or €180 a megawatt (MW) for power generated from waste, while under a system introduced earlier this year, our Government guarantees €120 a MW. Consumers ultimately pay for green energy tariff systems through their electricity bills. Governments do not pay the power generators directly.
Converting brown bag waste to energy means that it is not dumped in landfill sites. As European governments and municipal authorities increase landfill costs, opportunities for businesses such as Kedco are likely to grow.
The company does not develop its own technology. Mr Buckley said it prefers to use systems that are already proven. It uses a variety of processes for dealing with waste.
The company's board includes Alf Smiddy, who stepped down as chief executive of Beamish Crawford shortly after the Competition Authority gave Heineken the go-ahead to take over the company this month. Mr Smiddy is a non-executive, as is Donal O'Sullivan, former chairman and executive director of Exxon Mobil subsidiary, Esso Ireland, as well as being director of the Irish Petroleum Industry Association.
