Peter Hristov

Ramoil Management Ltd. (PINK:RAMO) Stirs the Market with Its Last Announcement

by Peter Hristov May 17, 2011
RAMO_chart.pngYesterday, Ramoil Management Ltd. (PINK:RAMO, RAMO message board) hit the heaviest trading volume in the company's history on the market. The share price skyrocketed and almost reached the previous 52-week high. In fact, RAMO stock hasn't seen such a price level since 2002.

Most likely, the stock surged on the news which was issued yesterday. It disclosed some of the details about the renewable energy project in Romania. In general, RAMO intends to build a wind park of 45MWh with net asset value of $127 million. According to the announcement, the project will be executed in cooperation with the Romanian Government and the European Union.

The procedure for inclusion of a renewable energy unit in the public grid is typically a very bureaucratic one and ends with a power purchase agreement by one of the electricity distribution companies. In this regard, RAMO said that such agreements are already signed and will be published on its corporate site within a week.

RAMO_logo.jpgHowever, it seems that investors couldn't wait for official proofs of the announced deal and entered enthusiastically the trading session. With a project of this scale it would have been a relief for investors if the company testified it with an SEC filing. Unfortunately, being a pink sheet limited information company, it is not very like that RAMO will file an 8-K, so investors will have to find other ways to confirm the deal.

Another very important question is the financing of the project. It is not very clear how the company will provide the sum for the project and what part of it will be covered by local or European financing. In this regard, the last financial report of RAMO indicates that apart from the $950 thousand initial investment the company has no other assets.

So, it seems that more details on the deal will have to be disclosed before it can become clear whether yesterday's 125% spike is justified or premature.

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