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“The strategy for Rurelec has now evolved from survival in 2016 to stabilisation in 2020 and from this year it has become to rebuild shareholder value.
Since the appointment of turnaround specialist, Andy Coveney, in 2016 the business has been restructured, debt has been paid off, the cost base reduced, overseas assets have been sold, the share register has been freed from a controlling interest and new capital has been injected. We can now look to the future with optimism.
The Company has now delisted from the AIM market of the London Stock Exchange, which saves some cost and allows us the opportunity to negotiate and execute a transaction without the restriction of Listing rules and continuous disclosure. We are currently considering transformative acquisitions in the Oil and Gas sector which is favoured by some of our new investors and where we can see the opportunity to create value. While it is difficult to predict the outcome of negotiations with third parties and funders, we anticipate that if the current discussions are successful, we will be able to announce further details in the autumn.
Notwithstanding the short-term advantages of not being listed, we remain mindful of the importance to shareholders of being able to buy and sell shares in the Company, and our medium-term ambition is to relist on AIM or another market in order to allow our investors to crystalise value. In the meantime, we ask for your patience as we work towards this goal; relations with our investors is a high priority and we are willing to engage directly while we are not listed. Please contact us through the website initially, or on 0207 549 2839.
At the current time, the Company’s main asset is the 701 turbines (the “Turbines”). We continue to pursue a sale of the Turbines; and a number of separate discussions have taken place with third parties. Disappointingly earlier discussions were not fruitful for reasons unconnected with Rurelec, but new interest has emerged. While this is encouraging, discussions therefore remain at an early stage, and this serves to highlight the complex nature of power projects. The timing of any potential sale of the turbines remains highly uncertain owing to the limited demand and infrequent occurrence of projects into which the turbines could be injected. It is difficult to predict whether these potential counterparties will be able to enter into heads of terms and secure the necessary finance such that a deposit can be paid, or any sale could complete. If no project is found into which these assets can be included, it is becomes increasingly likely that the turbines will be scrapped or sold at less than their Net Book Value to a trader in such assets. Meanwhile there is a cost to the Company of insuring and storing the Turbines which must be balanced against the probability of a successful sale in light of the time that has elapsed since marketing began in earnest.”