OPG Power Ventures plc Long Term Freight Arrangement (3479O)
August 06 2014 - 2:00AM
UK Regulatory
TIDMOPG
RNS Number : 3479O
OPG Power Ventures plc
06 August 2014
6(th) August 2014
OPG Power Ventures plc
("OPG" or the "Company")
Extension of relationship with Noble Chartering
Long Term Freight Arrangement with Noble Chartering provides a
hedge on coal freight costs for OPG's current operating
capacity
OPG (AIM: OPG) has entered into a joint venture arrangement
("JVA") with Noble Chartering (a wholly owned subsidiary of Noble
Group Limited) ("Noble") to secure attractive long term rates for
international freight. The Company has previously used, for its
coal shipments, vessels contracted through Noble Chartering.
An equity investment of US$9m to access attractive long term
freight rates for ten years
Under the Long Term Freight Arrangement ("LTFA"), between them,
OPG and Noble are to purchase and own, jointly and equally, two
64,000t cargo vessels. The cost of each vessel has been agreed with
one of the world's largest and leading shipyards at approximately
US$28m (GBP17m) and each of OPG and Noble are to invest
approximately US$9m (GBP5m) in stages over the period to delivery
of the vessels in early 2017 as their equity contribution to the
JVA.
OPG and Noble will manage 1.5mt of cargo per annum under the
LTFA for at least ten years
Under the terms of the LTFA, the Company will commit to provide
1.5mt per annum for carriage by the two vessels for a minimum
period of ten years at competitive long term rates, with this
volume of affreightment expected to meet the imported coal
requirements of OPG's current operating capacity at Chennai.
OPG and Noble are committed to deploying the best of their
combined expertise to manage both the vessels and cargo to achieve
savings against prevailing shipping rates and effective operation
of the fleet of two vessels. Technical management and maintenance
are to be performed by a leading third party global ship
manager.
LTFA expected to provide better predictability and control over
a major cost item
Freight costs have in the past made up approximately 25% to 40%
of the total landed cost of the imported coal OPG has purchased,
depending upon activity and rates in the bulk cargo market. After
scheduled delivery of the vessels in January 2017, by virtue of the
project based nature of the freight arrangement, OPG will be
charged an LTFA rate under the JVA for the shipment of its imported
coal cargo which is expected to be lower than the long term
contract rates that are currently available to the Company.
Accordingly, the Directors believe that this LTFA is strategically
attractive as it ensures visibility, control and competitiveness of
the cost of transportation for all of OPG's imported coal
requirements for Chennai I, II and III.
For further information, please visit www.opgpower.com or
contact:
+91 (0) 44 429 11
OPG Power Ventures PLC 211
Arvind Gupta
V Narayan Swami
Ajay Paliwal
Cenkos Securities (Nominated Adviser
& Broker)
Stephen Keys / Mark Connelly +44 (0) 20 7397 8900
Tavistock Communications
Simon Hudson / James Collins +44 (0) 20 7920 3150
About OPG
OPG is operating and developing power projects in India under
the group captive model with 270 MW in operation and a further 492
MW under development. In the year ended 31 March 2014 the Company's
revenues were GBP99m, EBITDA GBP31m and EPS 4.1p.
About Noble Group
Noble Group (SGX: N21) manages a portfolio of global supply
chains covering a range of agricultural and energy products, as
well as metals, minerals and ores. Operating from over 140
locations and employing more than 70 nationalities, Noble
facilitates the marketing, processing, financing and transportation
of essential raw materials. Sourcing bulk commodities from low cost
regions such as South America, South Africa, Australia and
Indonesia, the Group supplies high growth demand markets,
particularly in Asia and the Middle East. In order to ensure the
integrity of its supply chains, the Group has a portfolio of
interests in strategic logistics and processing assets which form
an integral part of facilitating its key trade flows. We are ranked
number 76 in the 2014 Fortune Global 500. For more information
visit www.thisisnoble.com.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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