Rurelec PLC Trading Statement (7455R)
September 16 2014 - 2:00AM
UK Regulatory
TIDMRUR
RNS Number : 7455R
Rurelec PLC
16 September 2014
16 September 2014
Rurelec PLC
("Rurelec" or "the Company")
Trading Update
The Directors of Rurelec PLC (AIM: RUR), the owner, operator and
developer of power generation capacity internationally, are pleased
to announce that the Company's projects are progressing well and to
provide the following update:
Chile
Rurelec's Termonor subsidiary has given notice to the relevant
authorities in Chile for the start of works on its Parinacota
project in Arica and expects to start preliminary works in
mid-October.
Rurelec is considering offers for a 50 per cent stake in
Termonor and expects to complete a sale at a premium to book value.
In the meantime the debt required to complete the plant is expected
to be secured early in 2015 and the equity of the Parinacota
project has been fully paid up by Rurelec.
Rurelec is also considering offers for 50 per cent of its
Central Illapa project, where it also expects to complete a sale at
a premium to book value. Rurelec intends to complete financing and
commence construction early in 2015, subject to finalising
arrangements with a partner.
Pending the completion of the sale of the share stakes in the
Parinacota and Illapa projects, Rurelec has put on hold the planned
trading in its shares on the Santiago Stock Exchange.
Peru
Rurelec's Peruvian run of river hydro subsidiary, Cascade Hydro,
has completed construction of its Canchayllo project, which is
expected to enter service at the end of this month. Its successful
construction is a milestone for Rurelec since it constitutes both
the first hydro development to be built by Rurelec as well as the
first new generation capacity following the May 2010
nationalisation of Rurelec's Bolivian assets.
Cascade Hydro has agreed terms for the sale of a substantial
share stake in the Canchayllo project which will allow Cascade to
repay third party loans and release funds to Rurelec. Completion of
that share sale is expected to occur in early October. Cascade has
identified more opportunities to build up its small hydro
development portfolio up to 200 MW over the next five years.
Rurelec is currently negotiating partnership arrangements
covering both small hydro and large hydros in Peru. This is
significant since Rurelec has recently been informed by the
government of Peru that the long anticipated Proinversion tender
process for large hydro power purchase agreements (PPAs) will
finally be announced at the start
of October. Rurelec owns the 255 MW run-of-river Santa Rita
project in Ancash Province which is expected to be one of the
leading contenders for a large hydro PPA.
Argentina
The Energia del Sur (EdS) plant in Comodoro Rivadavia continues
to trade at record levels and is reported to be the highest
availability plant in Argentina. The strong cash flow from EdS has
permitted the continued monthly repayment to Rurelec London of its
outstanding US dollar denominated project loans in spite of the
continuing excitement in international markets over Argentina's
negotiations with the debt "hold-out" hedge funds.
Major Alliances
Rurelec is exploring one or more major alliances in Latin
America to allow the Company to accelerate its growth without the
need to ask existing shareholders for further capital. This is part
of a wider Rurelec strategy to return to paying dividends. That
strategy can only be achieved when Rurelec has more operating power
plants under ownership or management. By teaming up with large,
regional players in Latin America, the Company expects to be able
to trade off its Independent Power Corporation subsidiary's
nineteen year track record in developing, constructing and
operating gas fired combined cycle power plants for equity stakes
in thermal projects funded by larger partners wishing to switch to
gas fired capacity.
Commenting on the trading update, Peter Earl, CEO of Rurelec
said:
"With the Bolivian settlement behind us, we are now looking to a
future where we return to a growth trajectory with new partners. We
have a strong platform of projects and we have a presence in the
key markets of Latin America which are increasingly attractive to
investors. Our recent share price performance significantly
undersells the value of what we have put together in recent years.
"
For further information please log onto our website at
www.rurelec.com or contact:
Peter Earl, CEO, Rurelec PLC Tel: 020 7793 5610
Ana Ribeiro, Head of Communications
Paul Shackleton & David Hart Tel: 020 7776 6550
Daniel Stewart & Company Plc
--------------------
James Joyce and James Bavister Tel: 020 7 220 1666
W.H. Ireland
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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