Simec Atlantis Energy shares have slumped in early trading after it called an emergency meeting to raise £341,000 to pay out a shareholder and replace its auditor, EY.
The company, which owns a flagship tidal project in the Pentland Firth called MeyGen, owes the six figure sum after it terminated a share place agreement with a US-based investor.
In what has been a series of ongoing woes for the business, Simec (SAE) had previously highlighted in its interim update it had ended its agreement with New Technology Capital Group on 28 September, the same day it posted the financial figures.
‘No further funds’ from investor
The renewables company had said it had received a second tranche of investment in March worth £2m but that “no further funds will be drawn down pursuant to the agreement” with New Technology.
Initially the deal with the investor, struck in December 2020, was set to raise as much as £12m.
Instead Simec said it would settle funds due New Technology as a result of the termination through the issue of new shares “in due course”.
Today the company said it will look for the green light from shareholders in December to raise issue up to 40,000,000 ordinary shares to meet the outstanding balance owed.
It is the second time it has gone to investors to raise cash in recent months. It took a further £2.6million from investors in a placing in September.
Further, Simec announced it would seek approval from shareholders at the emergency general meeting (EGM) to appoint Moore Stephens as auditors after its current bean counter, EY, announced in August its would relinquish the role.
EY had told SAE it would would “not to seek reappointment” as its auditor and agreed to stay in office until a replacement was appointed.
In its statement, SAE highlighted that the appointment of the new auditor was conditional on EY obtaining approval to reign the account from authorities in Singapore, where London-listed SAE is domiciled.
In July, SAE announced its largest shareholder – GFG Alliance, the troubled group controlled by industrialist Sanjeev Gupta – had wrested back control of the business from the clutches of receivers.
Mr Gupta owns Simec UK Energy Holdings (SUEH), which holds a 31.8% stake in SAE according to filings on its website. This is down from a 43% a few months ago.
GFG has also been in the spotlight since the Serious Fraud Office (SFO) announced it was launching an investigation into the group of companies, 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.
The SAE EGM will be held 9 December 2021 in London and will also be accessible via a live audio-only stream.
Shares in the AIM-listed firm were down 3.6% to 1.35p around midday.