Feb. 20 (Bloomberg) -- Atlantis Resources Corp., a Morgan Stanley-backed maker of tidal turbines, raised 20 million pounds ($33 million) with a European grant, funds from a government institution and an initial public offering in London.
The Singapore-based company raised 12 million pounds by selling about 12.8 million new shares at 94 pence each on London’s Alternative Investment Market, Chief Executive Officer Tim Cornelius said. That values Atlantis at 72 million pounds.
Most investors were London-based institutions, with some from continental Europe, Cornelius said. Morgan Stanley, which had 45.7 percent before the placing, didn’t sell any shares.
“We chose AIM because people in the U.K. market are familiar with the renewables sector and there is good support,” Cornelius said. “People understand the landscape here.”
Atlantis also raised 8 million pounds through a cash grant from the European Commission and from a government institution that offered non-recourse financing repaid from future profits.
Funds investing in renewable energy have listed in London in the past year as investors seek steady dividends that beat returns on government bonds. Ingenious Media Holdings Plc last month said it was planning to raise 160 million pounds.
The tidal-power industry is in its infancy, with developers testing prototypes in the hope of bringing systems to market. As yet there are no commercial-scale projects in operation.
“It’s a growth story because we have a global portfolio and it’s a new and emerging market,” Cornelius said by phone. “From that perspective I think people tend to find it really interesting. It’s not solar and it’s not wind.”
Part of the proceeds will be spent on developing the 86- megawatt first phase of Atlantis’s MeyGen project in Scotland.
Construction is expected to start early in the second quarter, generation is projected from early 2015, and capacity may eventually reach as high as 398 megawatts.
The project seeks to take advantage of government subsidies for the power it produces, with Scotland offering one of the highest for tidal energy. Waters in the region are estimated to account for as much as a quarter of Europe’s tidal resource.
Any remaining money from the funds raised will be invested in development of turbine technology alongside Lockheed Martin Corp. and for investments around the world, Cornelius said. The company is pursuing projects in Canada, India and China.
--Editors: Tony Barrett, Randall Hackley