RE: Emailed Buchanan2 Jul 2019 09:06
Thanks for the email. There is no reason to be suspicious about this item as the description around Gneiss’ services and associated fees are fully transparent within the Statements.
Gneiss has played, and continues to play, a pivotal role in setting Solo on the right path. The company’s consulting services include advice, support and execution for business development and divestments, as well as the two fundraisings (plus open offer). They have also seconded senior management into Solo in the form of Dough Rycroft, MD, and John Daniel, Technical Director, enabling Solo to be well resourced with experienced management team to oversee this transitional period, whilst also keeping control of costs. This kind of outsourcing was also an integral part of Solo’s strategy to reduce the cost base and maintain capital discipline.
The final thing to mention is that these costs are largely exceptional items in terms of costs being associated with the successful rationalisation of the portfolio and, more importantly, the ongoing processes Solo is currently engaged in with regards to delivering business development in line with the stated strategy. As such these fees would have been paid to any firm delivering the services so they are, for all intents and purposes, unavoidable costs associated with this crucial stage in the company’s evolution.
Solo is obviously direct with the fact that Gneiss is founded by Jon Fitzpatrick who sits on Solo’s Board as NED. For clarity’s sake, the agreement is with Gniess and not with Jon, and the agreement was in place before Jon joined the BoD following arm’s length negotiations and a contractual arrangement with the former board.
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