(Alliance News) - Highlands Natural Resources PLC on Wednesday said Chair & Chief Executive Robert Price has resigned and the company is planning to close its natural resources business to focus on Cannabidiol, or CBD.
Shares in Highlands were trading 27% lower at 5.06 pence each in London.
Nick Tulloch, currently finance director, has been made CEO and the company is seeking to appoint a new chair "in the coming weeks".
The company is also planning the "orderly sale or closure of its natural resources business" to focus on its Zoetic CBD business. Cannabidiol, or CBD, is found in cannabis and has potential benefits as a treatment for pain and anxiety.
Outgoing CEO Price has offered his assistance with the natural resources exit and Highlands is currently "negotiating with him in regard to a possible sale of some or all of the natural resources assets to him".
Highlands said its natural resources business has a number of liabilities, particularly taxes on its East Denver project production and abandonment costs for operations in Montana.
According to Highlands, the potential capital value and cashflow of its East Denver project is higher than these liabilities but any future capital contribution from the natural resources portfolio would be hurt by the lack of upside on its earlier stage projects.
Highlands has recently received invoices for work at its natural resources business, which will not repeat under the new strategy.
The company has also increased its Zoetic inventories in advance of presentations to possible new customers.
Given the invoices and the inventory increase, Highlands has decided to fully drawn down its USD500,000 loan to fulfil costs. The sale of the natural resources assets is expects to produce enough funds to repay the bank facility.