Cogenpower wants to raise £1m by listing 5,000,000 shares at 20p each, giving it an anticipated market capitalisation of £10m.
Cogenpower's power plants and district heating networks deliver cheaper, cleaner heat and energy to nearby communities of up to 50,000 people. It uses fuels like natural gas, as well as renewable sources, such as biomass.
The company's main country of operation is Italy but it's seeking to expand into the UK which it says has promising growth prospects. It would have first-mover advantage in the Britain's district heating market which, although de-regulated, is at a considerably earlier stage than the Italian market.
“The UK is a very a good market for what we do. The policies that the UK government has launched are very, very exciting for us," Francesco Vallone, Cogenpower's chief executive, told City A.M.
The UK government wants to increase the amount of heat demand met by district heating from two to 14 per cent by 2030. It also wants up to 50 per cent of buildings to be connect to heat networks by 2050.
District heating generates heat at a central power source, such as a power plant, and supplies it to a number of buildings through a system of insulated pipes. It has a number of benefits, such as reducing heating bills and cutting carbon emissions.
Cogenpower plans to use its technology to offer even cleaner energy in the future, having acquired a biomass power plant in December which Vallone says has "essentially pushed our company into the biomass sector".
It’s arguably a brave time to list, given the recent financial market turbulence, and uncertainty emanating from the in/out referendum which will be held before the end of 2017.
“My view is that businesses don’t like barriers and uneven playing fields, so in that sense, Brexit could be extremely disruptive" Vallone said.
"Having said that, movement towards a low-carbon and greener economy is driven by international factors and agreements that exceed EU borders; the biggest driver of change in the energy industry will be powered by people’s desire for cleaner air and cleaner environments for generations to come,” he said.
Allenby Capital Limited is acting as nominated adviser and broker and EnVent Capital Markets is acting as financial advisor in Italy and placing agent.