Cindrigo Holdings shares climbed sharply on Wednesday after the company unveiled an £11 million funding package alongside a new biomass joint venture in Finland aimed at strengthening its energy platform and diversifying revenues.
The group said it had secured backing from a strategic investor consortium through a combination of equity investment and financial guarantees.
Around £6.7 million will be invested in Cindrigo at 12p per share, representing a premium to recent market prices, while a further €3 million will be injected into a newly created subsidiary, Fuelwood Finland Oy.
Investor reaction was swift, with shares rising by roughly 65% to 6.5p in early trading.
An additional £2 million has also been committed to provide further capital support if warrants linked to the deal are not exercised.
The agreement coincides with the launch of Fuelwood, a wood pellet production venture that Cindrigo will initially own a 20% stake in, with the option to increase its holding to a majority position over time. The joint venture will be funded with approximately €4 million through three-year development loans carrying interest of 9%.
Cindrigo said the funding would support the development of an initial production capacity of 80,000 tonnes per year by the end of 2026. Longer term, the facility could scale up to around 400,000 tonnes annually, with estimated revenues of about €20 million in the near term and potentially €100 million once fully operational, based on current pellet prices.
The company expects the venture to play a strategic role in its wider operations. Fuelwood is set to become the primary customer for energy produced by Cindrigo’s Finnish heat-generation assets, reducing reliance on external buyers and creating closer integration across its biomass, heat and power businesses.
In addition to long-term growth prospects, the group will generate near-term income through a management services agreement with the joint venture. This is expected to deliver monthly fees of €75,000 during 2026, contributing around €1 million in revenue for the year.
Chief executive Lars Guldstrand said the deal marked a shift from planning to execution for both funding and strategic partnerships, adding that the combined investment would underpin the company’s expansion and help establish an integrated sustainable biomass platform. He noted that the structure would enable Cindrigo to align pellet production with energy demand while building recurring income streams and increasing ownership over time.
Cindrigo shares jump after £11m funding deal and biomass joint venture launch
