The Alternative Investment Market uncovered

Mar 25 2008 By Jez Davison

THE Alternative Investment Market has provided opportunities for several Tees companies looking to raise capital to fund expansion programmes.

Middlesbrough renewables firm Helius Energy raised just over £2m in its float on AIM in January 2007 to kick-start plans to build three biomass plants in the UK.

Although it posted a £1.2m loss in its first set of results since the float, the biomass energy specialist is confident it is making good progress towards the projects, which are based on Teesside, near Grimsby and on the North-west coast.

The construction and operation of the biomass power plants are expected to save more than half a million tonnes of carbon dioxide each year.

Meanwhile, the companies behind two of the Tees Valley’s key biofuel plants - D1 Oils in Middlesbrough and Biofuels Corporation at Seal Sands - have also experienced the roller-coaster ride of being an AIM-listed company.

The latter spent three years on AIM before de-listing last year after debts to its bankers became too large to manage. It undertook a 94% swap of its equity in its main subsidiary - Biofuels Corporation Trading - with Barclays Ventures, in exchange for the cancellation of debt which had risen to £106m.

Chief executive Sean Sutcliffe said the restructuring of the business was necessary due to US subsidies, which were damaging the competitiveness of it and other home-grown businesses.

The problem lies with US biofuels importers getting a hefty 25% subsidy from their government plus UK tax breaks when their products hit this country’s markets.

These subsidies also put the future of D1 Oils’ biofuel refinery in Middlesbrough in doubt recently and led to City rumours that the company is seeking a £30m cash injection. It is understood to be concentrating on production of its alternative feedstock jatropha rather than biofuel - but this is unlikely to involve the Teesside operation.

The Teesside plant is part of a much larger global operation, whose future as an AIM-listed company looks to remain solid.

Hartlepool provider of electronic manufacturing services, Stadium Group, has no such problems. In the group’s sixth director shareholding since February 28, chief executive Nigel Rogers purchased 13,850 shares at 67p each, describing it as a vote of confidence in the company’s future growth.

The company floated on the main market in 1996 before moving across to AIM in 2001.