Rurelec PLC Trading Update on Peru, Chile and Argentina (1713G)
March 02 2015 - 2:00AM
UK Regulatory
TIDMRUR
RNS Number : 1713G
Rurelec PLC
02 March 2015
2 March 2015
Rurelec PLC
("Rurelec" or "the Company")
Short Term Loan Facility
Trading Update on Peru, Chile and Argentina
The Directors of Rurelec PLC (AIM: RUR), the owner, operator and
developer of power generation capacity internationally, are pleased
to announce that, following the successful conclusion of a number
of partnership deals, the Company has been able to reduce the size
and improve the terms of its short term loan agreements with Radix
Investment UK Limited ("the Radix Facility" or "the Facility"). The
combined loans are now GBP550,000 and will be repaid on 31 March
2015 from the proceeds of the contracted sale of a controlling
equity stake in Rurelec's Canchayllo hydroelectric plant in Peru.
Rurelec is due to receive net proceeds of US $6.5 million from this
sale during the course of March. As part of the reduction in the
size of the facility, Rurelec has agreed with Radix not to issue
the 16.8 million warrants to subscribe for new Ordinary shares in
Rurelec at an exercise price of 7.3 pence per share previously
announced on 24 December 2014. Rurelec will now be making the
previously announced payment to IPSA Group PLC from the proceeds of
US $6.5 million.
Cesar Flores is to remain as General Manager of and a
shareholder in the Canchayllo plant.
A further development in Peru has been the release of the much
anticipated Proinversion large hydro tender process for the award
of new capacity contracts. Rurelec's wholly owned Santa Rita
project is expected to participate in this Proinversion tender.
While award of power purchase agreements will not occur until the
end of 2015, the release of the official tender documents has
permitted Rurelec's investment banking advisers in New York, INTL
FC Stone, to put a firm timetable in place for the selection of a
partner or partners to subscribe new equity at the project level in
this US $550 million project of 255 MW for which Rurelec.
Participants in this formal Rurelec partner selection process
include large regional electricity utilities, private equity funds
and Asian multinationals. Selection of a preferred partner is due
to occur by May 2015.
In Chile, Rurelec's preferred partner for the purchase of a
stake in the Illapa project has received investment committee
approval to proceed to detailed binding agreements for the
acquisition of a 50 per cent stake in the project. The offer values
the equity of the Illapa project at US $60 million.
In Argentina, Rurelec continues to work on a transaction
intended to release and repay in US dollars the bulk of the
Company's project loans to its Energia del Sur combined cycle gas
turbine power plant. Rurelec has now initiated a 40 MW expansion
project in Comodoro Rivadavia for the installation of a 6B open
cycle gas turbine under a new Resolution 220 contract with payments
denominated in US dollars. Energia del Sur continues to perform
well and it remains one of the highest availability plants in
Argentina. This in turn has meant that it has been able to continue
its monthly payments to Rurelec London in reduction of project
loans
Commenting on the loan and recent developments, Peter Earl, CEO
of Rurelec said:
"Our partnership negotiations are finally producing signed
contracts. Rurelec has always intended to work in 50:50
partnerships in Latin America, as we have since our flotation in
2004, and that 50:50 policy continues with the exception of
hydroelectric plants where our target has always been to own no
more than 20 per cent of any one plant. This policy allows us to
maximize our involvement with the minimal cash investment per
plant.
"We never intended to have so many greenfield developments on
the go at any one time but that policy was forced upon us by the
2010 nationalisation of our Bolivian power plants, which were the
main cash generators for the group. We are now building new
capacity to replace lost megawatts and we are successfully selling
down stakes as we always planned to do. Radix has helped us to
achieve our goals. The next step will be to conserve cash on our
balance sheet in anticipation of a future return to dividends."
-Ends -
For further information please contact:
Rurelec PLC W H Ireland CNC Communications
Peter Earl, CEO James Joyce, Paul Shackelton Ana Ribeiro, Ian Brown
and James Bavister
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Tel: 020 7793 5600 Tel: 020 7220 1666 Tel: 020 3219 8818/
020 3219 8817
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Or visit our website: www.rurelec.com
This information is provided by RNS
The company news service from the London Stock Exchange
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