Rurelec PLC Update regarding Energia del Sur, S.A. (6106Y)
December 07 2017 - 1:00AM
UK Regulatory
TIDMRUR
RNS Number : 6106Y
Rurelec PLC
07 December 2017
Rurelec PLC
("Rurelec" or the "Company")
Update regarding Energia del Sur, S.A.
Further to the announcement of 19 October 2017, the Directors of
Rurelec (AIM:RUR), have been in discussions with the management of
Energia del Sur S.A. ("EDS"), which owns and operates the 136 MW
Southern Patagonian CCGT power plant in Argentina, regarding the
resumption of debt repayments owed to Rurelec Project Finance
Limited ("RPFL").
Following the August 2017 shutdown associated with the failure
of certain steam turbine blades, EDS continues to operate the plant
at reduced output - the steam turbine is operating at around 21 MW
output rather than the usual 43 MW, giving the power station a
maximum nominal output of 97MW. EDS management has brought forward
the target date for the planned maintenance of the steam turbine to
May 2018. This overhaul should restore the plant back up to full
output.
In the meantime, EDS management reports that cash flow is very
tight as a result of a material loss of income from the profitable
Resolution 220 contract for the electricity generated by the steam
turbine. EDS is generating just enough cash to cover its operating
costs with minimal capacity to repay RPFL debt until the plant
resumes full output and cash is received from that output 60 days
later in mid-2018. EDS is liaising with insurers regarding a loss
of profit claim and are pursuing an interim payment which may
enable some debt repayment to recommence before mid-2018.
In order to bridge the working capital gap caused by the
temporary suspension of receipts from EDS, the Directors of Rurelec
are actively examining further funding options to meet its working
capital requirements, should it be needed. Accordingly, until this
situation is resolved the Company's working capital position
remains severely constrained.
Further updates will be provided as negotiations progress.
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
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