Ram Power will go through a complete reorganization, focusing on its Nicaragua operations and activities, with its its current CEO Shuman Moore leaving the company in February 2013.
In a release earlier this week, Ram Power, Corp. (TSX: RPG) announced a corporate reorganization and strategic initiatives to enhance long-term cash flow and shareholder value.
In January 2013, the Board of Directors (the “Board”) requested the Special Committee composed of the independent directors to conduct an extensive review of its current corporate structure with a focus on maximizing long-term cash flow.
The Board, based on the recommendations of the Special Committee, approved a series of actions as follows:
Corporate Reorganization: The Company will conduct a reorganization of its corporate office in Reno, Nevada, reducing both expenses and staffing levels to better align the organization to focus primarily on its Nicaragua operations including the continuing operation of the San Jacinto resource, the development of a binary unit at San Jacinto, and the exploitation of its Casita resource. The corporate reorganization will take place during the current quarter. The reorganization is expected to save approximately $4 million a year annually in corporate administrative cash expense or approximately 50% of the Company’s current forecast for 2013 and 2014. After severance and other costs, the Company expects that the net impact of the reorganization in 2013 will be a savings of approximately $3 million.
In addition to the reduction in general staff at the Company’s head office, Acting CFO Selby “Bud” Little’s contract service agreement with the Company will not be renewed following its expiration on March 31, 2013 and current Chief Executive Officer and Director Shuman Moore will resign from the Company and the Board effective February 15, 2013. Antony Mitchell will continue as Executive Chairman and will remain the senior executive of the company. Further, Jose Antonio Rodriguez, Vice President, Operations and Chief Operating Officer of Latin America, who has played a key role in the San Jacinto operations over the past 24 months, will assume a more active role in establishing the strategic focus for our future development efforts in Nicaragua. Mr. Rodriguez has 18 years of experience in a number of senior management positions focused in developing and operating geothermal plants in Central America, and the Company will be utilizing this experience to further enhance the operations and profitability of our Nicaragua assets.
Antony Mitchell, Ram Power’s Executive Chairman, stated, “Shuman Moore came to Ram Power at a very challenging time. His management and international business skills, geothermal knowledge and project execution experience were exactly what was needed to get the Company’s flagship Nicaraguan project, consisting of two 36 MW units, built and in service on time and on budget. With all his objectives accomplished, and in alignment with the Company’s revised corporate strategy, Mr. Moore will be returning to his previous energy consulting business in mid-February. We wish Shuman every success in his future endeavors.”
Antony Mitchell, Ram Power’s Executive Chairman, stated, “While it is always challenging to reduce staffing, the Company’s goal was not a given number of job reductions, but rather the elimination of duplicating efforts in Reno, and at our subsidiary level in Nicaragua,” added Mr. Mitchell. “The Company will become leaner, and more efficient in its support of the development of projects in Central America while safeguarding expenses and risks, thereby delivering long-term value for shareholders.” Mr. Mitchell further commented that the combination of the reduced expenses from the corporate reorganization and the anticipated cash improvements from the strategic initiatives will significantly improve the Company’s balance sheet.”
Source: Company release via Renewables Biz