Coro Energy has announced that in light of the unprecedented market changes, its board has initiated a material cost-reduction programme. As a result, James Menzies, the company’s CEO, saw his employment terminated with immediate effect. The board also mutually agreed with Nick Cooper that he will leave the company with immediate effect. Following these changes, the board will consist of James Parsons as nonexecutive chairman and Andrew Dennan, Marco Fumagalli and Fiona MacAulay as non-executive directors. As result of recent developments and Coro’s current situation, we are suspending our valuation.
Coro’s board is implementing a material cost-reduction exercise to position the company for the new environment the oil and gas industry is facing. The board offered the executive directors different options including taking an unpaid sabbatical; receiving three months’ notice (subject to conditions), payable in new ordinary shares in the company, for terminating their employment; and/or stepping into an NED role. James Menzies did not accept any of the options and the board terminated his employment with immediate effect without payment (excluding notice provisions in his service agreement). Share options previously awarded to Mr Menzies have also lapsed.
At 31 March 2020, Coro had unaudited cash of c $4.5m, according to the company. The board estimates that cost reductions, including a reduction in G&A on an annualised basis by c $2.3m, will result in sufficient working capital to meet its requirements until April 2021, when the second annual coupon payment becomes due on Tranche A of the company’s €22.5m Eurobond.