Arowana - Innovative Achievement in Growth

Company: Arowana, Sydney, NSW, Australia
Category: Innovative Achievement in Growth

Nomination Title: Arowana's VivoPower Turnaround to Growth

VivoPower International PLC (“VivoPower” or “the Company”) is a NASDAQ listed sustainable energy solutions company founded by Arowana with business units in renewable energy, electric vehicles, battery technology and critical power services. Today, Arowana remains the parent of VivoPower with operations in the UK, Australia, United States and Europe.

In March 2020, VivoPower's share price was languishing below US$1 with a market cap of only US$10m and the Company was at risk of being relegated from the NASDAQ to the OTC Pink Sheets market, rendering capital raising impossible.

With COVID-19 lockdowns in its key markets, VivoPower looked doomed.

Arowana’s founder and Executive Chairman, Kevin Chin, stepped in as CEO of VivoPower in March 2020 and formulated and executed a hyperturnaround plan codenamed "Operation Sunfish", specifically targeting the key problems identified, as follows:

1. The Company was able to extend its projected runway of 5 weeks of cash through key executives including the CEO taking equity compensation in lieu of cash compensation, entering deferred payment plans with landlords and other fixed cost creditors, and cutting all non-essential costs to an absolute bare minimum.

2. Many of the creditors were overdue. Negotiations were swiftly entered with all creditors, with deferred payment plans of up to 9 months agreed to.

3. Stock price declined to an all-time low of US$0.68 in March 2020, subjecting the company to potential relegation from NASDAQ.

4. The Company was contending an aggressive lawsuit initiated by a former CEO costing significant time and money in defending its position.

5. The CEO realized he had to “defibrillate” the culture, the 3 elements were:
(i) he challenged the VivoPower team to prove the naysayers wrong, fostering a “siege mentality”;
(ii) the core team were aligned with performance stock unit (PSU) shares with a strike price of below $1. As the stock price started to rise over the ensuing months, this became incrementally motivational; and
(iii) execution excellence was driven, with defined quarterly “Objectives and Key Results” (OKRs) ingrained and daily huddles held to review completion of OKRs on an execution tracker board and ensure daily accountability. Importantly, a mindset of daily achievement was imbued: close something daily, no matter how small it is.

6. A transformational strategic pivot to electric vehicles (EVs) was engineered, with targets identified and diligenced a transaction of Tembo e LV B.V. (Tembo), who specialises in EVs in mining and infrastructure sectors, was subsequently consummated. The strategic rationale was to transform VivoPower from a solar development and critical power services company competing in a “red ocean” to a company that delivers end-to-end sustainable energy solutions (incorporating EVs) that enables its customers to decarbonize and accelerate towards net zero status. This is a blue ocean strategy given very few companies deliver a holistic net zero solution.

As a result of “Operation Sunfish” led by Arowana, VivoPower's share price hit an all-time high of US$24 in October 2020, representing a 2400% increase in just 7 months, and provided the platform to consummate an oversubscribed US$28.75m capital raising, marking the completion of the hyperturnaround of VivoPower.

List the people and organizations that contributed to the development of the nominated work.

Kevin Chin - Executive Chairman & CEO of Arowana
Alex Assim - Investment Director, Arowana
Michael Hui - Investment Director, Arowana
Matt Davis - Managing Director, VivoPower
Melissa Frayer - Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Eddie Grossman - Maxim Group

Links:

https://arowanaco.com/operating-companies/vivopower/
https://arowanaco.com/why-arowana/team/investments-operations-team/kevin-chin/
https://vivopower.com/news-and-insights/vivopower-signs-definitive-agreement-to-acquire-51-of-tembo-e-lv/
https://vivopower.com/news-and-insights/vivopower-raises-usd28-75-million-in-upsized-public-share-offering/
https://vivopower.com/news-and-insights/vivopower-enters-heads-of-agreement-with-gb-auto-for-250m-tembo-distribution-in-australia/
https://vivopower.com/news-and-insights/vivopower-recognized-in-global-top-50-in-2021-real-leaders-impact-awards/
https://vivopower.com/news-and-insights/vivopower-named-official-battery-technology-partner-for-tottenham-hotspur/
https://vivopower.com/news-and-insights/
https://arowanaco.com/wp-content/uploads/2021/02/AWN-HY-2020-12-31-Interim-Financial-Report-FINAL.pdf
https://www.reuters.com/companies/VVPR.OQ/charts