Rurelec PLC

Our Strategy

The strategy for Rurelec has now evolved as the disposal of the Argentinian interests and the reduction of the cost base over recent years has stabilised the financial position of the Group. We will continue to seek to sell the turbines which may take some time and concurrently we will recapitalise the business through a transformative acquisition to deliver shareholder value. We are in the early stages of considering opportunities which will take some months to prepare. We are also mindful of our obligations to complete an AIM Rule 14 compliant acquisition with the relevant timelines. Any such AIM Rule 14 compliant acquisition will be subject to shareholder approval; will be notified without delay and will be accompanied by the publication of an AIM Rule compliant admission document in respect of the proposed enlarged entity. The proposed acquisition may or may not be in the power and energy sector.

For a number of years, the Company’s shares have traded at a significant discount to net asset value making it dilutive to issue new shares. The Directors believe that this discount can be reduced or be eliminated if the turbines are sold, or their value can be ringfenced for the benefit existing shareholders. This is now a priority for us in the short term and ahead of any acquisition.

Non-Executive Director’s Statement of the 2022 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. 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 JV;
  • Working with joint venture partners to ensure that debts from those entities are repaid to the fullest extent possible;
  • 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 and
  • Look to recapitalise the business through a transformative acquisition

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.

The Group and the Company are fully compliant with this principle.

For further information on our strategy please read the Strategic Report of the 2022 Annual Report and Accounts

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