Our Strategy

The overall strategy for the Group remains in line with that adopted since 2016. The Board has continued to stabilise the financial position of the Group, which will enable as much value to be realised from the asset portfolio. That value will then be returned to shareholders.

In order to make it possible the Directors are proceeding with a capital reconstruction of the Company as referred to in the Non-Executive Director’s Statement of the 2019 Annual Report and Accounts.

In Accordance with the QCA Code and Principle 1, the Board is committed to strengthening the Group’s underlying financial position before seeking opportunities to consolidate or expand its business. The Board sets out to deliver long-erm value to shareholders in the following ways:

• Stabilising the Group’s position by reducing cash outflows;
• Reducing the Company’s vulnerability to fluctuations in the timing of debt repayments receivable from subsidiaries and joint ventures;
• Working with joint venture partners to ensure that debts from those entities are repaid to the fullest extent possible;
• Paying off debts and creditor arrears to restore the business to financial stability;
• Using that financial stability to permit an orderly realisation of assets and investments in a timescale that allows maximisation of the proceeds of such sales;
• Where asset realisations are not possible in the short term due to market conditions, preserving the value of those assets and/ or maximising the cashflow generated by those assets;
• Undertaking development of projects only where to do so involves low risk and where appropriate funding for the project has already been secured.

The execution of this strategy presents key challenges in the maximisation of returns on assets given market conditions. Those challenges are addressed by ensuring that the Company is stable enough to be able to avoid having to offload such assets when to do so would minimise value, instead choosing to seek opportunities to maximise the long-term returns that will optimise value for shareholders.

The business model as to how the Company plans to make money for its investors revolves around maximising the long term collection of debts owed in connection with the joint venture formed to develop the EdS business in Argentina, and the maximisation of dividend payments after those debts are repaid, whilst repaying Rurelec’s own creditors and continually assessing the value and saleability of its assets with a view to developing and/or realising those assets in such a way as to maximise the returns to all shareholders.

For further information on our strategy please read the Strategic Report of the 2019 Annual Report and Accounts