Strategy and Board Update

RNS Number : 1191H

OPG Power Ventures plc

04 April 2022

 

4 April 2022

OPG Power Ventures plc

("OPG" or the "Company")

Strategy and Board Update

OPG Power Ventures plc (AIM: OPG), the developer and operator of power generation facilities in India, announces an update to its strategy and changes to the composition of the Board.

Due to supply chain disruption caused by COVID-19 and the recent and ongoing global energy crunch, seaborne coal prices have experienced record highs.  While OPG is not changing its guidance for the year ended 31 March 2022, and while the Company currently has adequate financial liquidity available to mitigate the situation, management are taking measures aimed at limiting the financial impact of this fuel price spike. These include sourcing more lower-priced, moderate quality domestic coal to lower the Company's breakeven cost levels.  Should the fuel price spike continue in the long term, regulated power tariffs in India along with those charged by the Company and others to industrial and commercial customers will be required to rise as India continues to source electricity from non-renewable and renewable sources.

OPG has long recognised the need to embrace clean energy.  Indeed, the Company's longstanding and stated strategy has been to develop its Indian commercial and industrial power generation portfolio in line with the clean energy strategy of the nation, while not compromising upon financial discipline.  The Board believes the current fuel price spike, India's commitment to addressing global climate change and its need to be more self-sufficient in energy, mean that now is an appropriate time to accelerate the Company's energy transition strategy.  Consequently, the Board is implementing the following changes:

(i) Mr Arvind Gupta, Chairman, will step down from the Board with immediate effect and be replaced by Mr N. Kumar as Non-executive Chairman

(ii)      Ms Avantika Gupta, who has served as the Company's COO since 2018, to be appointed as CEO with immediate effect

(iii)  A 'new energy panel' to be established within the Company reporting to Avantika Gupta and the Board will augment its energy transition expertise in the near future

Mr Arvind Gupta will be available to the Company to ensure an orderly transition to the new Non-executive Chairman and CEO.

Commenting on the changes, Arvind Gupta said: "It has been an honour and a privilege to lead OPG over the last 14 years. I am very grateful to our talented team, as I am to OPG's investors and many other stakeholders, with whom we have worked together to build long-term generation assets and a sustainable business that fills an important energy gap in the industrial and economic growth of India. This is the right juncture at which to refresh our leadership and implement transition strategies to better serve the fast growing and evolving energy needs of India's industrial growth. Our team has achieved much in developing our 414 MW platform from minimal beginnings and I am confident that OPG will achieve further success in the future."

N. Kumar, Non-executive Chairman, commented: "On behalf of the Board, the OPG team and our shareholders I would like to acknowledge and thank Arvind for his tireless service to the Company since its formation.  Since joining the Board in November 2019, I have seen for myself that the Company has an ethos of excellence, generating attractive returns and cash flows, deleveraging the balance sheet, excellent stakeholder and customer relationships, and of course safe and clean operations which provide an excellent platform from which to continue our work.

The world's energy demands are changing rapidly in all sorts of ways and India is at the forefront of those changes. Given the scale and diversity of the work to be done and the opportunities that lie ahead, I look forward to working with Avantika who has the right credentials and experience to make the most of this platform and lead us into the new energy age.

We will be selecting the most appropriate technologies to build a portfolio that contains the most efficient and smart sustainable solutions with our investment in Atsuya Technologies Private Limited, a Chennai-based sustainability solutions provider, which was reported on 23 February 2022, being a stepping-stone. I look forward to the continued support and encouragement of shareholders in helping this momentum to build on a programme of projects and initiatives we are evaluating."

For further information, please visit www.opgpower.com or contact:

OPG Power Ventures PLC	[phone]
Dmitri Tsvetkov
Cenkos Securities (Nominated Adviser & Broker)	[phone]
Stephen Keys / Katy Birkin
Tavistock (Financial PR)	[phone]
Simon Hudson / Nick Elwes

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

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