HELIUS Energy has parted company with its chief executive and commercial director and embarked on a redundancy process as the renewable company takes radical steps to save costs.
Shares in Helius, backed by Scots investors Alastair Salvesen, Angus MacDonald and Ann Gloag, plunged by nearly 30 per cent as it flagged its precarious cash position to the market.
The company, which operates the Helius CoRDe biomass plant in Speyside, hopes the boardroom changes and redundancies will generate sufficient working capital until February.
But the fragility of its cost base throws doubt on its ability to deliver a £380 million renewable energy plant in Avonmouth in south west England. Helius said raising finance for the 100 megawatt biomass plant, which will generate low-carbon renewable electricity, remains a priority.
The latest development comes after the company revealed an industrial partner had knocked back the opportunity to invest in and operate the Avonmouth plant.
That blow followed a call by Helius for short-term working capital from existing investors. Scottish seafood mogul Alastair Salvesen invested a further £315,000 to raise his stake to 26.4 per cent, and fellow Scottish entrepreneur Angus MacDonald invested a further £200,000 to lift his shareholding to 18 per cent under the pre-emptive offer.
Under the restructuring announced yesterday, chief executive Adrian Bowles and commercial director Christopher Corner have stepped down with immediate effect. However, the duo will continue to work for the company as consultants until at least the end of February.
The company has also launched a wider redundancy programme to streamline its cost base. Helius declined to comment on the number of jobs at risk, but said the process would be aimed at the plc, rather than the CoRDe plant.
The biomass plant, a joint venture between Helius, the Combination of Rothes Distillers (CoRD) and Rabobank, makes renewable energy and liquid animal feed from the by-products of whisky distilling.
The company is now being led by chairman John Seed, who has become executive chairman in the short term, chief operating officer William Ingram Hill, and chief financial officer Alan Lyons.
Helius said in a statement: "The redundancy programme announced today relates to roles within Helius Energy plc. There are currently no plans to instigate such a programme in respect of the Rothes plant.
"The Helius team remains geared to providing the best support to the Rothes project, which is a critical part of its business."
Helius said it is working towards a solution where the management service income and future dividends from CoRDe will cover its cost base in future.
However, it warned its "cash position remains tight", adding that "in the event the company is unable to secure financing for the Avonmouth project or to match its cost structure to CoRDe dividend receipts, it is likely that the company will need to raise additional financing".
Mr Seed said: "The past year has been extremely challenging for the energy sector. Our priorities remain to fund and commence construction of our Avonmouth project as soon as possible and to continue efficiently operating the Helius CoRDe plant in Rothes to maximise first dividends from that project."
Shares closed down 1.02p, or 29.29 per cent, at 2.48p.
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