Sondrel CEO steps down as chip firm faces re-organization

Business news | April 7, 2024

By Peter Clarke

Graham Curren, is standing down as CEO of loss-making ASIC design services company Sondrel Holdings plc. The company has received financial support from ROX Equity Partners Ltd. and is now set to return to private ownership.

After nearly 23 years leading Sondrel, Curren is being replaced by David Mitchard who comes in as interim CEO. Mitchard was previously managing director of Maritime Services at BAE Systems. Via a posting on Linkedin Curren said he intends to form a subsidiary company called Sondrel Ventures that will focus on strategy and business development.

In the first half of 2023 Sondrel made a loss before tax of £2.0 million on revenue of £9.3 million. Since then the company has had to contend with cash-flow challenges after a tape-out for a tier-one automotive customer was delayed towards the end of 2023. A consensus analyst forecast had expected Sondrel to achieve FY23 revenues of £13.0 million and an adjusted loss before tax of £6.0 million.

On January 10 2024 Sondrel announced that, because of the delay, approximately £2.7 million of revenue associated with the automotive project would not be recognized in FY23. Sondrel also said that FY23 revenue was expected to be approximately £10 million with a corresponding impact on FY23 loss before tax.

Payroll delayed

On February 5 Sondrel announced that it had received £1.5 million in relation to the ASIC engagement with its automotive tier-one customer and it had been able to meet the payroll deferred from December 2023, the January 2024 payroll and certain creditor payments.

Since then ROX Equity Partners Ltd., a UK-based private equity firm, has agreed to provide Sondrel with convertible loans worth £2.9 million. The loans are related to a forthcoming fund-raising exercise that has a target of £8.5 million, including the ROX loans.

Under the terms of one of the loans, Sondrel has agreed to implement a transformation plan. This plan includes Curren transitioning from the position of CEO and the appointment of two additional independent non-executive directors in due course. It also requires Sondrel to seek to cancel its membership of the London Stock Exchange’s Alternative Investment Market.

In a statement Sondrel said: “The company and ROX are of the opinion that the costs and complexities of being quoted on AIM do not benefit the company and its shareholders during a period where the business is undergoing transformation.”

Curren is set to take up the role of CEO of Sondrel Ventures at completion of the fund-raising exercise. It is anticipated the proposal to exit AIM will be put to shareholders within six months of the completion of the fund-raising exercise, although no timetable has been given for the fund-raising.

“I will be starting a subsidiary called Sondrel Ventures, which will focus on a part of the business that I enjoy most – the strategy and growth,” said Curren in the Linkedin post. He added that he would remain a director of Sondrel Holdings plc.

Founded in 2002, Sondrel provides design ASIC consulting at the leading edge from architectural exploration through to volume-packaged silicon chips. Curren took the company public in October 2022 via a listing on AIM (see Sondrel IPO sees biggest UK chip deal since ARM).