10 August 2017
Quadrise Fuels International plc
("Quadrise", "QFI" or the "Company")
Directorate Change and Cost Reduction Initiatives
Quadrise Fuels International plc (AIM: QFI) announces that in addition to its existing rigorous approach to cost management, the Company has taken a number of actions to further reduce costs, whilst retaining its ability to deliver its active projects and pursue business development opportunities in the power and marine markets.
Directorate Change
Hemant Thanawala has agreed to step down as Finance Director and will become a Non-executive Director, with immediate effect. This enables the Board to restructure and streamline the number of Executive Directors from three to two. The Company will retain its focus on sound cash management, allied with strong project accounting, led by the Financial Controller, David Scott, FCA. The Finance Director functions will be absorbed within the existing senior team.
Further Cost Reduction Initiatives
Mike Kirk, Executive Chairman, has agreed to reduce his cash salary by 50% with effect from 1st September 2017 with an uplift on the deferred element for potential future payment of 25%. In addition, the Non-executive Directors of the Company, including Mr Thanawala, have agreed to reduce their directors' fees to £24,000 per annum, with the balance being deferred, for potential future payment with an uplift of 25%.
The General Manager roles have been restructured to enable the three segments of Refinery, Power and Marine to be covered effectively by two General Managers. In addition, the laboratory personnel roles at the Quadrise Research Facility have been reduced by one.
The Company's advisers have also agreed to significant reductions in fees.
In total, these actions are expected to deliver annualised cash-cost savings in excess of £500,000, around 18% of the Company's underlying (non-project specific) annualised costs.
Business Development and Project Delivery
Quadrise continues to invest in its project delivery and business development capabilities. Maersk's decision to end the operational and LONO trial early, despite the positive results was clearly disappointing. However, it was based on a policy decision by Maersk to use low sulphur fuels, for IMO 2020 compliance and was not based on any issues with the MSAR® fuel - with Maersk having confirmed that good progress was made and no issues had arisen with the use of MSAR®.
Quadrise and many market commentators still believe that the use of high sulphur fuels in conjunction with Exhaust Gas Cleaning Systems, or scrubbers, will offer the lowest cost of compliance with the IMO 2020 sulphur regulations. We will continue to use the positive results of the trial, together with the interim LONO and inspection report from Wärtsilä to actively pursue other opportunities in the marine market.
In the power market, Quadrise has continued to invest significant senior management time into driving the project in Saudi Arabia forward and this is delivering substantive progress. A more comprehensive update will be provided in due course, but the project remains on track to commence later in 2017.
Mike Kirk, Executive Chairman, said:
"This has been a challenging period for Quadrise and we have made some important cost reductions to ensure that we can still actively pursue the significant opportunities for MSAR® in the power and marine markets.
The cost savings are designed to have no impact on our operational or business development capacity. As part of this process, Hemant has agreed to move into a Non-Executive role, so that we can continue to benefit from his experience and knowledge of the business. I would like to formally thank Hemant for his contribution to Quadrise over many years as the Finance Director and I look forward to working with him in his new role as a Non-Executive Director. I would also like to thank our non-executive directors and advisers for their support in the cost reduction initiatives.
We remain motivated and committed to delivering value to shareholders from our unique technology."
Notes to Editors
QFI is the emerging supplier of MSAR® emulsion technology and fuel, enabling a low-cost alternative to heavy fuel oil (one of the world's largest fuels markets, comprising over 450 million tonnes per annum) in the global shipping, refining and power generation markets.
For further information, please refer to the Company's website at www.quadrisefuels.com or contact:
Quadrise Fuels International Plc |
|
Mike Kirk, Executive Chairman |
+44 (0)20 7031 7321 |
|
|
Nominated Adviser |
|
Smith & Williamson Corporate Finance Limited |
|
Dr Azhic Basirov |
+44 (0)20 7131 4000 |
Ben Jeynes Katy Birkin |
|
|
|
Broker |
|
Peel Hunt LLP |
|
Richard Crichton |
+44 (0)20 7418 8900 |
Ross Allister |
|
Chris Burrows |
|
Public & Investor Relations |
|
FTI Consulting |
|
Ben Brewerton |
+44 (0)20 3727 1000 |
Sara Powell |
|
|
|
|
|
