Kistos: Simple Yet Different
I hate corporate-speak. And as far as I am aware- most other people hate corporate-speak, too! What does it look like to take a complex corporate-speak statement and change it to be simple + different? See below to see my take:
Previously, I wrote about thinking simple + different. Recently, I have been thinking about how I can apply this mentality to Kistos.
According to the most recent press-release:
Kistos is a trading company that has been established with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector.
Ew. Talk about corporate-speak. Management mind as well just spoken in Scottish. Maybe I would have laughed at least!
Here- let me translate:
Kistos buys and sometimes operates energy companies while thinking about the effects to the environment
This is the conventional way of describing Kistos. However, I do not think that this definition tells you much. How does Kistos buy companies? What does it mean to “sometimes” operate? How to they measure their effect on the environment? What type of energy assets are they limited to?
To be fair, I just came up with that description- so don’t blame management!
Although the above definitions describe Kistos, I think the following would be more accurate in capturing the essence of the company :
Kistos creates exit packages for energy companies. Kistos then focuses on maximizing acquired and maximizing their long-term cash flow- like a utility. At the same time, the company focuses on reducing their carbon emissions to a negligible amount.
To illustrate, the same team at Kistos used a similar strategy at RockRose, where they acquired Marathon Oil UK in 2019:
Marathon Oil wanted to divest UK assets to focus on US assets
UK assets had $110M in underfunded pensions (aka nobody wanted this)
Andrew Austin & team bought the company for $140M
Received $335M cash, 35M barrels of oil
The pension was later sold for a profit
Marathon wanted to exit the area and RockRose put together a package for them so all sides could walk away happy. Employees got their pensions, Marathon exited the area, and RockRose shareholders were rewarded. After the transaction was completed, RockRose increased the oil reserves by 5M barrels of oil- an example of maximizing the assets like a utility company. Talk about a win-win-win!
So that is it: Kistos creates exit packages and maximizes their assets. Pretty simple to understand! Or- at least simpler than the corporate speak description.