Rurelec PLC Update regarding Energia del Sur & Working Capital (6683B)
September 24 2018 - 1:05AM
UK Regulatory
TIDMRUR
RNS Number : 6683B
Rurelec PLC
24 September 2018
Rurelec PLC
("Rurelec" or the "Company")
Update regarding Energia del Sur, S.A. & Working Capital
Further to the announcement of 25 April 2018, 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
commence a major maintenance shutdown of its steam turbine in
mid-October 2018.
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
maintenance needed to restore the plant back up to full output had
suffered lengthy delays 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 EdS to enable the major maintenance to take place
("Loan Finance")).
CAMMESA have indicated they will now allow EdS to make drawdowns
against the Loan Finance and have made the initial payments during
the course of last week to fund the first Euro EUR1.09 million of
maintenance expenditure. Consequently, EdS's management intends to
commence the maintenance of the steam turbine in mid-October and
the works are scheduled to complete mid-to-late December. During
this maintenance, the plant will be able to continue generating
power at up to 76MW from its two gas turbines operating in open
cycle. However, it should be noted that the successful completion
of the maintenance of the steam turbine depends on CAMMESA funding
the full budgeted sum of up to US $6.4 million. Given recent delays
and the difficult conditions encountered by the Argentinian economy
at present, it is possible that CAMMESA will experience further
delays in approving subsequent tranches of funding needed to
complete the maintenance.
Working Capital
In the announcement of 25 April 2018 it was stated that Rurelec
Project Finance Limited was aiming to receive five debt repayments
of $300,000 from EdS as a result of an insurance settlement. These
payments were received .
Until EdS resumes full output or Rurelec sources alternative
funds, or generates funds from asset sales, Rurelec's working
capital position will remain severely constrained. Assuming the
major maintenance results in a return to full power output in late
December 2018, this should improve the cashflow of EdS from
approximately February 2019 and therefore enhance EdS's ability to
recommence regular repayments of debt to Rurelec Project Finance
Limited. However, there is no guarantee that EdS will be able to
recommence debt repayments in that timeframe. Rurelec continues to
explore other funding options and will provide further updates in
due course.
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
Tel: 020 7025 8026/8 Tel: 020 7220 1666
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END
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