UK 17:03 Wednesday, 7 October 2026
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
This morning AIM-listed Rurelec (RUR) which is rather fighting for its life announced that it has bought itself a little more time in the form of a new short-term secured (over all the assets of the company) loan of £850,000, which has already been fully drawn down. This will be repayable at the end of June and will repay the last short term secured loan from Radix (of £600,000), associated accrued interest as well as provide working capital.
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Comments
J C
You say “Of course, we are not told how much cash is being generated for the company so I would doubt that it adds up to much. But perhaps there is the possibility of a sale which might buy the board a little room further.” clearly without having done any research on the company. If there were a sale of Rurelec’s 50% stake in Energia del Sur in Argentina then that would likely include a sale of the loan book, which itself if worth many multiples of the current share price. You also talk about the company as if it is anything other than a shell that holds this Argentine asset. Most of the companies other ventures have failed or been sold to corrupt former employees (rhyming with pearl) for peanuts. Private investors will never know what is going on behind the scenes with such a terrible/dishonest NOMAD but you really are making the situation out to be worse than it is.
Nigel Somerville
J C – thanks for the comments. I agree with most of what you say and it really has been a tale of woe in so many directions.
As you suggest and as per the last numbers from the company there is substantial upside if the company can get finance but we’ve been waiting for the longer term loan deal for so long and the company has been clear that cash is very tight – even with this new secured short term loan.
My worry is that the upside will not find its way to the shareholders and thus think the shares are a sell. I guess it is a good thing that the new secured facility is longer than the old one to Radix so a little more breathing room than before. But if it can’t repay then it is game over if the security is called in. That would be a zero.
It is a binary bet, and you would have to be really sure of being told what is really going on even to think about it as a gamble – something ruled out (for me) given past history even though the boardroom looks rather different now.Perhaps the appointment of a new adviser would help with that (depending on who!)
I didn’t think RUR would make it into the new year – especially in the wake of the fundraising which was rejected – so I’ve been proved wrong so far. It still looks an awful situation, though, and I find it hard to see the company getting through its difficulties. But I’d welcome being proved wrong on that too.
J C
Thanks for your reply, I too agree with most of what you say but believe that the new loan is unsecured so that should eliminate the problem of security being called in. I can’t imagine all the legal problems Simon Morris would have if he let the company he is essentially running go under due to a debt owed to another company he is a director of.
The company claims that cash is “extremely tight” and yet they moved to significantly more expensive offices (as per the RNS 2 weeks ago), so I’m guessing that they are not as short of cash as they make out.
It is of course a big gamble with companies like this but with the prospect of a sale of Sterling’s controlling stake I think the most likely scenario is the company being taken private by someone closely involved with the group of RUR, IPSA and IPC. That would lead to significant returns for anyone invested at close to the current SP.
I don’t have much faith in the BOD of RUR as they seem to be have done very little other than negotiate short term loans over the past few months and have ignored the companies other projects. Luckily though, the 54% stake is in the hands of administrators who have a legal duty to obtain the best possible price, I can only hope they are successful in achieving something closer to the NAV.
Nigel Somerville
JC – from the RNS: “Radix has undertaken to release its debenture over all of Rurelec’s assets in favour of BPAC” and so I think the new loan is indeed secured. However I take your point that should push come to shove it would raise eyebrows, but it is still possible.
I have to say I am very surprised there is no Related Party Transaction statement here, given that the lender and the company have a director in common. But perhaps that is why the bit about the parent of the lender being in liquidation is there. I can’t see why that would be relevant, but maybe I’m just stupid! No doubt WHI is perfectly happy that it was not required and they are very clever chaps who know the rules better than I. But I’d love to see the explanation.
As far as the current BoD is concerned, it is hard to know what to think. Certainly the BoD from a year ago oversaw a car crash. The (short-lived) new boss walking in Dec a couple of weeks after the failure of the fund-raising is a worry, but perhaps he just carried the can. Or was there another boardroom split? Difficult to know.
The current BoD has much to prove and there’s plenty that can still go awry here…
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