Cindrigo Holdings shares surged on Wednesday after announcing it has secured funding from a strategic investor group worth more than £11 million in combined investment and guarantees, alongside the launch of an integrated wood pellet joint venture that promises to broaden the group’s revenue base and tighten its vertical integration in Finland.
It’s been a long road for Cindrigo, but they finally look to be making some headway.
Investors will pump approximately £6.7 million of equity into Cindrigo at 12p per share, a notable premium to recent trading levels, and inject a further €3 million into newly formed Fuelwood Finland Oy.
The extent of the premium Cindrigo secured the investment has played a big part in shares surging 65% higher to 6.5p on Wednesday.
A further £2 million has been committed to provide additional capital if warrants aren’t exercised.
Fuelwood, which Cindrigo will initially own 20% of with the right to move to a majority position over time, will be jointly capitalised with around €4 million via three-year development loans at 9% interest.
That funding is sufficient to deliver an initial production capacity of 80,000 tonnes per annum by the end of 2026, with a long-term target of around 400,000 tpa, implying revenue potential of roughly €20 million in the near term and circa €100 million at full scale based on recent wood pellet prices.
Crucially for the group’s existing assets, Fuelwood is expected to become the primary customer of energy from Cindrigo’s Finnish heat-generating business, reducing reliance on a single third-party off-taker and unlocking operational, cost and commercial synergies across industrial heat, pellet and power sales.
Cindrigo will also pocket near-term income through a Management Services Agreement with the JV, generating €75,000 per month during 2026 and an estimated €1 million of revenue in the year.
Lars Guldstrand, CEO of Cindrigo, said: “This announcement marks the transition from strategic intent to execution of both a funding and strategic partnership to support the Group’s expansion. The combined investment into Cindrigo and the Fuelwood joint venture provides a strong foundation for the Company’s continued development and our integrated sustainable biomass platform. The funds will enable us to commence pellet production while supporting the ramp-up of our energy operations in Finland.
“Fuelwood is a key component of our biomass strategy, linking sustainable pellet production with heat, steam and power generation. This integrated structure provides an opportunity to broaden our market reach, diversifying revenue streams and increasing our ownership over time. The Management Services Agreement provides operating control and recurring service income, while allowing us to align production and energy demand from the outset.”