1 March 2012 – vivergo

An update has been provided on the latest adjudication between Vivergo Fuels Limited and Redhall Engineering Solutions Limited.  The Adjudicator determined that the method adopted by Vivergo to measure the work done was not in accordance with the contract and therefore not correct.  It was anticipated that this ruling would determine an independent valuation of the works carried out by Redhall Engineering Solutions Limited on site.  However, Vivergo refused to carry out a full re-measure as proposed by the Adjudicator, which left him unable to make his assessment of value.  However, the Adjudicator dismissed Vivergo’s argument and awarded costs against them.

Redhall has stated that it remains confident of the eventual outcome of formal proceedings with Vivergo and in particular with the net balance sheet value of £8.3m currently carried.  The process is slower than hoped but it does not affect the running of the business, which continues to perform in line with market expectations.  We rate the shares as a SPECULATIVE BUY.