Renewable Power & Light’s new chairman calls company a 'Buggers Muddle'

In an update to investors, Renewable Power & Light (LON:RPL) revealed that the company’s financial position and history seems to be “worse than shareholders had been led to believe”. In a damning statement, the new management concludes that it is unlikely that any new investors would be able to satisfy due diligence, due to RPL’s turbulent history, and even as a 'cash shell' its future may be restricted.

"Unfortunately for shareholders it would appear that, as is often the case when things go wrong, they have been left nursing their losses whilst those who were supposedly in charge have been paid handsomely and walked away unscathed”, RPL chairman Duncan Soukup commented.

RPL’s new management team told investors that an in-depth review of the legacy issues that resulted in the collapse of the business is ongoing, and it is formulating a number of strategies, planning to submit proposals to shareholders shortly.

“To be blunt, RPL is a Buggers Muddle! The new board and management are working around the clock to establish who was responsible for the roughly US$90 million of losses suffered by the company, which include legal fees in excess of US$3.5 million spent on litigation against the company's former CEO”, Soukup added.

“I am confident that our investigations will throw light on who was responsible for this abominable mess and that we will then do everything we can to seek redress with a view to generating a recovery for shareholders.”

The new management team, of Duncan Soukup (Chairman), Peter Redmond (non-exec) and Robert Porter (non-exec) were appointed in May 2010. Concurrently, the company also hired a new Nominated Adviser and Broker  - Cairn Financial Advisers - and trading in the company’s share resumed on AIM.

Soukup is the founding shareholder and Chairman of Thalassa Holdings (LON:THAL),  RPL’s third largest shareholder with 11.07%. Bothe Soukup and Redmond are also directors of RPL’s second largest shareholder, CityPoint Holdings, which owns 18.77% of the company.

Back in March, the two parties - Thalassa and Citypoint - acting in concert with a 29.8% interest, requisitioned a general meeting to replace most of the previous board. Following RPL’s AGM on 18 May and the requisitioned EGM on the 19 May, Michael G Reynolds, Alexander S Lambie and Victor J Fryling ceased to be directors of the company, and the new team was appointed.

Among the votes cast, 96.3% of shareholders voted to install the new management team.

In the months leading up to the meetings, the entrenched board and its dissatisfied group of shareholders were in dispute over RPLs past performance and is strategy for the future, with a series of derisory comments being swapped between both parties.

In its full-year results statement, the old RPL board said that it had made significant progress in fulfilling its strategy, to realise value for its shareholder and potentially wind-up its operations, whilst highlighting that certain shareholders are believed to have alternative plans for the company.

“It is the board's view that [Thalassa & Citypoint] wish to take control of the direction of the company and use the remaining cash in the business to fund a new investment strategy going forward”, the previous management stated in April.

Shortly after, on 17 April, the previous management team told investors that “Thalassa had failed to propose a new investing policy which complied with the AIM Rules”.

During the twelve months ended 31 December 2009, the company disposed of its Elmwood Park and Massena power plants and biodiesel equipment, making a fundamental change of its business.

The phrase “a buggers muddle” is a colloquial military term, which was in common use in the British armed forces during the Second World War, it refers to a disorderly and/or ill-informed group.