Rurelec PLC Update regarding Energia del Sur & Working Capital (9844L)
25 April 2018 - 4:00PM
UK Regulatory
TIDMRUR
RNS Number : 9844L
Rurelec PLC
25 April 2018
Rurelec PLC
("Rurelec" or the "Company")
Update regarding Energia del Sur, S.A. & Working Capital
Further to the announcement of 7 December 2017, the Directors of
Rurelec (AIM:RUR), have been informed that the management of
Energia del Sur S.A. ("EDS"), which owns and operates the 136 MW
Southern Patagonian CCGT power plant in Argentina, are expecting to
sign an Insurance Settlement Agreement accepting an accelerated
insurance payment of US $2.5 million regarding a loss of profit and
material damage claim. The UK based insurance brokers to the
insurance policy have confirmed that as of today they are holding
funds of $2.493 million sent to them by the insurers to pay this
claim and they expect funds to be transferred to EdS within days.
Anticipating this claim, EDS has resumed monthly debt repayments
against the current outstanding debt of US $3.558 million owed to
Rurelec Project Finance Limited ("RPFL"), albeit at a reduced level
of US $300,000 per month for 5 months and has plans to make further
debt repayments in cash during 2018 despite the reduction in its
revenues, though there is significant uncertainty regarding the
deliverability of those plans.
As previously announced, the EDS plant has been operating at a
reduced output following the September 2017 shutdown associated
with the failure of certain blades in the steam turbine. The
planned maintenance of the turbine, which had been expected to
commence in April 2018 and which should restore the plant back up
to full output, will suffer further delay due to CAMMESA's shortage
of liquidity. CAMMESA is the organisation administering and
regulating the Argentinian wholesale electricity market and had
agreed to provide loan finance to enable the major maintenance to
take place. This delay will affect the return of EDS's plant to
full operating mode. EDS management is actively seeking alternative
finance to proceed with that overhaul as soon as possible thereby
mitigating its loss in revenue from operating at reduced
output.
Working Capital
Until Rurelec receives further insurance payments from EDS or
EDS resumes full output or Rurelec sources alternative funds,
Rurelec's working capital position will remain severely
constrained. Given the fluidity of the situation with CAMMESA and
the consequent uncertainty regarding the timing of when the plant
will resume full generation, there is currently limited certainty
associated with further debt repayments in 2018, including the
monthly payments of US $300,000.
Further updates will be provided.
For further information please contact:
Rurelec PLC W H Ireland (Nomad & Broker)
Simon Morris, Director Katy Mitchell
Andy Coveney, Director Alex Bond
Tel: 020 7025 8026/8 Tel: 020 7220 1666
This information is provided by RNS
The company news service from the London Stock Exchange
END
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