Renewables developer Simec Atlantis Energy (SAE) has said it is in “productive discussions” with receivers appointed over its majority shareholder, which is part of the troubled GFG Alliance international metals group.
The announcement from the company, best known for the MeyGen tidal project in the Pentland Firth, came as it released results showing it made losses of more than £19million last year.
SAE said it was focussing “with vigour and intent” on its tidal and hydro projects and the conversion of Uskmouth power station, in Wales, as the negotiations with the receivers continue.
Crisis-hit GFG, headed by entrepreneur Sanjeev Gupta, owns Simec UK Energy Holdings (SUEH), which holds a 43% controlling stake in SAE.
Last month GFG told SAE it had started legal proceedings over the appointment of receivers in the British Virgin Islands, where SUEH is registered, to “challenge the validity” of the move.
In a statement with its 2020 annual results, released today, SAE said: “On 18th May 2021, receivers were appointed over the company’s major shareholder, Simec UK Energy Holdings Ltd.
At the date of publication of these results, the company is in productive discussions with the receivers of SUEH and continues to focus on the tidal, Uskmouth conversion project and hydro projects with vigour and intent.”
Simec Atlantis was launched in 2005 and GFG’s involvement with the business started in December 2017.
SUEH was handed its stake in exchange for the Uskmouth power station, by Newport. The initial idea was to convert the coal-powered plant into eventually burning non-recyclable waste.
SAE’s annual results for the 12 months to the end of last December showed pre-tax losses of £19.4m, down from £36.2m the previous year. Its turnover increased to £12.2m from £4.8m over the period.
Writing in the annual report, chief executive Graham Reid, who was appointed in January, said the company would have to “adapt and improve” to take advantage of a future that held “more challenges and huge opportunities.”
Mr Reid also said: “MeyGen, the flagship of our marine energy division, continues to break world records and has now exported over 37 GWh (Gigawatt-hours) of electricity to the grid.
“What is exciting is that the next round of the contract for difference regime is expected to be announced this summer.
This could present SAE with the opportunity to develop MeyGen phase 2 – utilising the consents, grid connections and licences that are already in place taking the existing capacity to 86 MW (Megawatts.”
Last month it emerged the receivers had lodged a separate application to try to avert local trading rules in Singapore, where London-listed Simec Atlantis is domiciled.
They were seeking a waiver from the Singapore Securities Industry Council, which could require them to make a mandatory general offer for the company.
In May The Serious Fraud Office (SFO) announced it was launching an investigation into GFG Alliance, which also owns Fort William aluminium smelter.
GFG said it is co-operating with the probe, which is focused on suspected fraud, fraudulent trading and money laundering, including its financing arrangements with failed company Greensill Capital UK.
SAE is listed on the London Stock Exchange’s Alternative Investment Market (AIM).
By the close of Wednesday’s trading, its share price had fallen by 14.74% to 4.86p