Drax raises £190m in placing for biomass fuel conversion

POWER station operator Drax yesterday said it had raised £190m through a share placing to support the firm’s transformation into a biomass-fuelled electricity generator.

The FTSE 250 energy firm, which runs a coal-fired power station in Yorkshire, placed just under 36.5m shares, representing almost 10 per cent of its existing share capital, at a price of 520p each, raising £190m.

The placing formed part of Drax’s previously-announced £700m capital investment for the biomass conversion, so it can move away from coal-fired power to renewable energy.

It also plans to take on £200m in new debt, and has increased its existing £310m debt facility to £400m. There is also £230m in cash on Drax’s balance sheet to use for investment in the biomass fuel conversion.

Invesco and Schroders are two large shareholders that have taken up their full allocation in the placing, Drax said yesterday.

The shares will begin trading on the London Stock Exchange on 30 October.

Meanwhile, Drax said in a statement that its full-year expectations were unchanged as trading conditions in its commodity markets improved.