I must admit to having my jaw hit the floor this morning in relation to the announcement from Ceres Power’s management per below –
Following recent announcements regarding Ceres’ funding requirements, the Company announces that, despite extensive efforts it has been unsuccessful in securing sufficient funding for the business going forward. The Company will continue to explore all strategic options including a sale of the business, cancellation of the listing and in the absence of any alternative proposals commencement of an orderly wind down of the business. A further announcement will be made in due course.
Coming on top of the positive announcements on the 26th Jul and 18 Sep in which support was stated from British Gas and Itho-Daalderop and trialling of the CHP boilers to commence in 2014, it is beyond perplexing as to why management states that they have been unable to secure funding for the business. Something does not smell right to us here –
1. Why have they not explored partnership opportunities?
2. Why did they not go to shareholders with a rights issue?
3. Why have they not explored licensing the technology?
Remember, some £65m+ of capital has been spent on the technology over the past 8 years and British Gas invested £30m in the company at a price of 300p a share. To line up the route to market, have the technology recently revalidated by an industry expert and to announce serious progress with the commercialisation does not fit squarely to me with regards to “sorry chaps the games over” type announcement today. With a current market cap of £2.5m and cash of over £7m someone is looking to make a lot of money out of this. It looks to be a Plus Markets 2 to us…
David Pummell has some answering to do to his shareholders today and we are waiting on comment from him.