Rurelec PLC Partial Debt Repayment and Trading Update (2114F)
March 06 2020 - 2:00AM
UK Regulatory
TIDMRUR
RNS Number : 2114F
Rurelec PLC
06 March 2020
6 March 2020
Rurelec PLC
("Rurelec" or the "Company")
Partial Debt repayment and Trading Update
Further to the announcement of 28 November 2019 (the
"Announcement"), the Directors of Rurelec PLC (AIM: RUR) note that
Rurelec have received a further US $1.44 million by way of partial
repayment by Patagonia Energy Limited ("PEL") of the Amended and
Restated Loan Note, the majority of this sum was received earlier
this week.
The balance outstanding on the loan notes is approximately US
$21.27million with the first US $5 million of repayment shared
80/20 between Rurelec and Basic Energy Limited, the ultimate
shareholders of PEL, and then the balance paid 72:28 thereafter
(Rurelec: Basic Energy Limited). The total amount owing to Rurelec
is now US $15.48 million.
However, w hilst the agreements referred to in that Announcement
determine how funds generated by PEL will be distributed, the
timing of future payments is not certain as it is dependant inter
alia on:
i) the potential future cash generation ability of Energia del
Sur, S.A. ("EdS"), which operates the Argentina power project;
and
ii) the duration of exchange controls that firstly restrict the
ability of EdS to transmit funds to PEL and secondly increase the
money conversion cost of achieving those transfers; and
iii) delays being experienced by electricity generators in
Argentina in receiving payments of revenue from CAMMESA (the
Wholesale Electricity Market Regulator and Administrator).
Accordingly, there can be no guarantee as to when any further
loan repayments will be made.
The Directors also note the increased foreign exchange risk for
the Group resulting from the recent policy change announcement by
the Argentinian Government that revenue deriving from the
electricity generated by EdS from its gas turbines and sold on the
energy spot market will no longer be linked to the US Dollar but to
the Argentinean Peso retroactively to February 2020 and will be
updated monthly from March 2020. Revenue deriving from the 43.7 MW
of electricity generated under EdS's Resolution 220/2007 Power
Purchase Agreement ("PPA") (which sets the tariff for the output
from EdS's combined-cycle steam turbine), will however still be
linked to the US Dollar.
The Directors also note that this PPA expires on 9 September
2020 and will be superseded by a new tariff or, at worst case, be
sold on the energy spot market. The remuneration level of that
tariff/PPA is the subject of ongoing discussions with CAMMESA, the
outcome of which is currently uncertain. There is no guarantee that
those terms will be favourable to EdS or that, as a consequence of
these changes, EdS will remain economic although the Directors
remain optimistic as to a sensible resolution. Further updates will
be provided in due course.
For further information please contact:
Rurelec PLC W H Ireland (Nomad & Broker)
Simon Morris, Director Katy Mitchell
Andy Coveney, Director Lydia Zychowska
Tel: 020 7549 2839/40 Tel: 020 7220 1666
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END
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