Acquisition and Placing
Rurelec PLC
06 July 2005
6 July 2005
Rurelec PLC ('Rurelec' or the 'Company')
Placing of 8,750,000 Ordinary Shares at 40 pence per share
Acquisition of 50% interest in Patagonia Energy Limited
Re-admission to trading on AIM
Rurelec PLC, the British company established to develop rural electrification
projects in Latin America has entered into an agreement to purchase for cash a
50 per cent. interest in Patagonia Energy, a company incorporated in the British
Virgin Islands, from Basic.
Patagonia Energy wholly owns directly (and indirectly through Electrica) EDS,
which owns and operates a generating plant supplying electricity in the isolated
electricity system of Southern Patagonia, Argentina. The generating plant was
built in 1995 and comprises two General Electric MS6001B gas turbines in open
cycle, capable of generating up to 77MW.
The consideration of US $6 million in cash is payable in two or more tranches
depending on the profitability of EDS. The first tranche is fixed at US$4.5
million and is due upon Admission. The timing of subsequent payments of a
further US$1.5 million will vary according to the future profits of EDS. As a
result Rurelec and Basic will be joint venture partners in Patagonia Energy.
The Company is proposing to raise approximately £3,500,000, before expenses,
through the issue of 8,750,000 Placing Shares, to institutional and other
investors, at a price of 40 pence per Placing Share to finance the Acquisition.
The Placing Shares will represent approximately 41.0 per cent. of the Enlarged
Share Capital. At the Placing Price, the Company's market capitalisation on
Admission will be £8,540,000.
Owing to its size, the transaction constitutes a 'reverse takeover' for the
purpose of the AIM Rules and is conditional on shareholder approval. A circular
comprising an admission document under the AIM rules will be sent to
Shareholders today. This will include a Notice of an Extraordinary General
Meeting of the Company to be held on 29 July 2005, together with a form of
Proxy.
Enquiries:
Peter Earl 020 7793 7676
Rurelec PLC
Paul Shackleton
Daniel Stewart & Co. plc 020 7374 6789
Christian Dennis
Hichens Harrison & Co. plc 020 7588 5171
Daniel Stewart & Co. plc, which is regulated by the Financial Services
Authority, is acting as nominated adviser to the Company. It will not be
responsible to any person other than the Company for providing the protections
afforded to its customers or for advising any other person on the contents of
any part this announcement. The responsibilities of Daniel Stewart & Co. plc as
the Company's nominated adviser under the AIM Rules are owed solely to the
London Stock Exchange and are not owed to the Company or any Director or
Shareholder or to any other person, in respect of any decision to acquire
Ordinary Shares in reliance on any part of this announcement or otherwise.
Daniel Stewart & Co. plc is not making any representation or warranty, express
or implied, as to the contents of this announcement.
Hichens, Harrison & Co. plc, which is regulated by the Financial Services
Authority, is acting as broker to the Company. It will not be responsible to any
person other than the Company for providing the protections afforded to its
customers or for advising any other person on the contents of any part of this
announcement. The responsibilities of Hichens, Harrison & Co. plc as the
Company's broker under the AIM Rules are owed solely to the London Stock
Exchange and are not owed to the Company or any Director or Shareholder or to
any other person, in respect of any decision to acquire Ordinary Shares in
reliance on any part of this announcement or otherwise. Hichens, Harrison & Co.
plc is not making any representation or warranty, express or implied, as to the
contents of this announcement.
Background information on Rurelec
Rurelec was established specifically to develop rural electrification projects
and isolated generation projects in Latin America and was admitted to trading on
AIM on 18 August 2004. Rurelec's management team has experience in developing
international power projects and specifically in the electricity sector in Latin
America.
Acquisition of ESA
Following flotation, Rurelec embarked on a programme of acquisitions of power
plant equipment, the first of which was the purchase of ESA from Guaracachi in
October 2004. The consideration for the transaction was US$550,000 in cash.
ESA is the owner of two 3 MW Worthington dual fuel motors. These are small
machines which are suitable for rural generation. It is planned to redeploy them
to Trinidad in Central Bolivia to supply electricity to the local isolated
electricity system. These machines have been overhauled, dismantled and prepared
for installation in Trinidad utilising gas condensate.
Acquisition of 9 Jenbachers
In January 2005 Rurelec announced that it had acquired for cash nine Jenbacher
engines, each with a gross generation capacity of 2 MW, for a total of £1
million. Simultaneously, the Company sold six of these engines for the sum of £1
million which left Rurelec with the three remaining Jenbachers, and gross profit
on the transaction of £333,000. The remaining three Jenbachers are intended to
be installed in Yacuiba, Southern Bolivia, where gas supplies are available and
shortages of power exist. Negotiations leading to the deployment of these
machines are ongoing.
Background information on Patagonia Energy
The proposed Acquisition
Subject to the passing of the proposed EGM Resolutions, Rurelec will acquire 50
per cent. of the issued share capital of Patagonia Energy for consideration of
up to US $6 million in cash from Basic. The consideration is payable in two or
more tranches depending on the profitability of EDS. The first tranche is fixed
at US$4.5 million and is due upon Admission. The timing of subsequent payments
of up to a further US$1.5 million will vary according to the future profits of
EDS. As a result Rurelec and Basic will be joint venture partners in Patagonia
Energy. As at 30 April 2005 Patagonia Energy had net assets of US$ 61,000 and in
the period from incorporation on 22 October 2004 to 30 April 2005 it reported a
net operating loss of US$ 61,000. Financial information relating to Patagonia
Energy and its subsidiaries is set out in the Admission document.
The Patagonia Shareholders' Agreement determines how Patagonia Energy will be
managed. Neither party will have control of Patagonia Energy. Both partners are
able to appoint two directors to the board of Patagonia Energy and subsidiaries:
Basic will retain the roles of Chairman and CEO of Patagonia Energy, and Rurelec
will appoint the Deputy Chairman and the Finance Director.
Patagonia Energy directly (and indirectly through Electrica) wholly owns EDS, a
generating company located in Comodoro Rivadavia, whose only asset is Central
Termica Patagonia, a gas-fired power plant efficiently located near the centre
of the isolated electricity system in southern Patagonia. Electrica is a non
trading intermediate holding company, which directly owns 60 per cent. of EDS.
Patagonia Energy is currently owned by Basic, a Bahamian company with
electricity interests in the Dominican Republic. Patagonia Energy acquired EDS
and Electrica in October 2004 from Xcel Energy, a large United States
electricity utility.
EDS
The generating plant was built in 1995 and comprises two General Electric
MS60001B gas turbines in open cycle, capable of generating up to 77MW. On
acquisition in October 2004 by Basic the generators were not operating having
been taken offline and mothballed on 15 June 2002 and 4 January 2003
respectively. Patagonia Energy started recommissioning the units in November
2004 and both units are now in full service, dispatching into the MEMSP.
EDS has a forward contract of supply to sell 35MW of electricity to a
distribution company, Sociedad Cooperativa Popular Limitada de Comodoro
Rivadavia. The contract is renewable annually, the first anniversary falling on
1 May 2006. EDS sells the remainder of its output at the spot price into the
MEMSP.
Gas is supplied to the plant under a contract with Camuzzi expiring on 30
September 2006, through a pipeline, which is also operated by Camuzzi. The cost
of gas is billed to EDS in Argentine Pesos and the price is regulated by Ente
Nacional Regulador del Gas (ENARGAS), the gas regulator. The gas industry in
Argentina is in the process of reorganisation, splitting the activities of
supply and distribution/transmission and this may lead to an increase in gas
prices. EDS is obliged to seek an alternative gas supplier with effect from 1
October 2006. However, a new contract with Pan-American Energy, an Argentine
subsidiary of BP plc, for the supply of gas is under negotiation and the
Directors do not anticipate difficulties in finding new gas suppliers as
Patagonia is an area rich in gas. EDS envisage that it will continue to contract
with Camuzzi for the transport of gas even though it will be using an
alternative gas supplier.
From June 2005, routine maintenance is undertaken by Capime, under an 18 year
contract payable in US dollars. In addition to the provision of spare parts for
planned outages, Capime is also obliged to provide spares at cost on a just in
time basis for forced outages. EDS pays a flat monthly fee plus a usage fee
based on the number of hours each generating unit operates. Capime guarantees
certain operating performance parameters.
The Argentine electricity market
CAMMESA, the regulator for the wholesale electricity market is involved in the
settlement of electricity charges as follows:
(a) Withholdings by CAMMESA of profits generated in the spot market
Pursuant to the Resolution, EDS is paid for its operating cost (the regulated
fuel price plus an allowance for operations and maintenance determined by
CAMMESA) but the revenue that exceeds this predetermined operating cost is
withheld by CAMMESA and settled as described in paragraph (c) below.
In addition, EDS receives a capacity fee.
(b) Withholdings by CAMMESA of profits generated under forward contracts Under
the forward supply contract with Sociedad Cooperativa Popular Limitada de
Comodoro Rivadavia, EDS invoices the customer and is paid directly. However, the
transaction is still subject to the Resolution and EDS is responsible for paying
over to CAMMESA an amount equivalent to the difference between its operating
cost and the spot price. Such amount paid over to CAMMESA again is settled as
described in paragraph (c) below.
(c) Use of CAMMESA retention
Retentions by CAMMESA are divided into two tranches. 65 per cent. of the
retention will only be released for investment in new generating capacity. EDS
is analysing the feasibility of converting its units to combined cycle. If this
investment is undertaken before July 2007, this should result in the release of
withheld funds to EDS, allowing it to recognise profits and benefit from more
efficient generation.
The remaining 35 per cent. of the funds are withheld pending repayment at a date
as yet unspecified.
(d) CAMMESA loan
EDS has drawn down an interest bearing loan of Arg $4,760,000 from CAMMESA to
fund recent maintenance and overhaul of the two generators.
This loan will be repayable in 12 monthly installments commencing in June 2006.
Assets owned on Admission
On Admission Rurelec will own:
• ESA, which in turn owns two Worthington dual fuel motors, 6 MW in
aggregate;
• three Jenbachers, 6 MW in aggregate; and
• a 50 per cent. indirect interest in Central Termica Patagonia, a 77 MW
gas-fired power plant in Patagonia, described above.
Investment strategy
The Directors' strategy is to continue to acquire, or invest in, companies with
established electricity generating operations or generating assets suitable for
redeployment in the rural electrification and isolated generation sectors in
Latin America. The investment strategy of the Company may be extended in the
future if appropriate opportunities to acquire or invest in generating assets
operating on an interconnected system within Latin America are available.
Furthermore, the Directors have identified opportunities to manage the
implementation phase of rural electrification projects as well as investing in
the generation assets that are required to satisfy the increased demand
associated with that expansion.
Any generating capacity deployed by the Company will, wherever possible, be
supported by Power Purchase Agreements expected to incorporate payments for both
capacity and energy production.
The Directors are keen to promote sustainable projects based on locally-produced
fuel supplies and will, where practicable, promote the use of renewable fuels
for electricity generation.
Current trading and prospects
ESA has commenced negotiations with fuel suppliers and ENDE in connection with
deploying the Worthington dual fuel motors to Trinidad in Central Bolivia. The
motors are in the process of being overhauled, dismantled and prepared for
transportation. Contracts for transporting the engines and for site preparation
will be signed only when fuel and offtake terms are known.
Rurelec has also entered into a contract to dismantle the three Jenbacher units
currently located on the Isle of Wight with a view to their re-installation in
Yacuiba, Southern Bolivia and work has started. Negotiations for the fuel and
offtake contracts have commenced. Further commitments will be delayed pending
agreement of the principal terms.
Rurelec is also actively exploring expansion opportunities in areas of northern
Argentina and is in negotiations with EDESA, the Salta electricity distribution
company, for the provision of new small power units to meet the electricity
shortages in Salta.
Details of the Placing.
The Company is proposing to raise approximately £3,500,000, before expenses,
through the issue of 8,750,000 Placing Shares, to institutional and other
investors, at a price of 40 pence per Placing Share pursuant to the Placing
Agreement.
The Placing Shares will represent approximately 41.0 per cent. of the Enlarged
Share Capital. At the Placing Price, the Company's market capitalisation on
Admission will be £8,540,000.
Following Admission, the Directors (and companies connected and/or associated
with them) will hold, in aggregate, approximately 19.4 per cent. of the Enlarged
Share Capital. The Directors are not subscribing for Placing Shares.
The Placing Shares will rank pari passu in all respects with the Existing
Ordinary Shares. Dealings in the Placing Shares are expected to commence on 1
August 2005. It is anticipated that CREST accounts will be credited on the day
of Admission and that certificates will be dispatched by first class post by 4
August 2005.
Directors
Biographical details of the Directors are as follows:
James West, Chairman and Non-Executive Director, aged 58. Following a successful
career as Managing Director of Globe Investment Trust plc, Jimmy West became the
Chief Executive of Lazard Asset Management and a Managing Director of Lazard
Brothers & Co. Ltd, where he held full responsibility for the bank's investment
operations. He is now Chairman of Gartmore Fledgling Trust plc and Jupiter
Second Enhanced Income Trust plc and is a non-executive Director of a number of
diverse companies including Candover Investments plc, British Assets Trust plc
and Global Natural Energy plc.
Peter Earl, Managing Director, aged 50, began his career at the Boston
Consulting Group advising state owned companies. He has advised ministries of
finance and central banks in Abu Dhabi, Albania, Kuwait and Saudi Arabia. He is
the author of the standard European textbook on cross-border takeovers published
by Euromoney. Formerly Chief Executive of Tranwood plc and The Carter
Organization Inc., in New York, he acted on secondment to the World Bank and the
United Nations Development Programme, advising on privatisations in Latin
America and Eastern Europe, where he has served as Deputy Chairman for the
United Nations Economic Commission for Europe infrastructure finance group. He
was a director of Fieldstone Private Capital Group Limited ('Fieldstone') in
London. In the mid-1990's, he advised on US$6 billion of cross-border power
sector acquisitions and bids, involving 5,000 MW of installed capacity and more
than 2 million distribution customers. In 1995, he founded IPC which has owned,
developed and operated 3,400 MW of power projects around the world including in
Kazakhstan, USA, Argentina and Bolivia. He is an Oxford University graduate and
was a Kennedy Scholar at Harvard University.
John Michael Eyre, Director of Engineering, aged 51, is both a Chartered and
European Engineer and has extensive experience in project management and
development in the power sector. As a Central Electricity Generating Board
engineer, he spent part of his early career on secondment to Eskom of South
Africa with responsibility for maintenance of a portfolio of 26 power plants. He
subsequently became Head of Engineering Quality with National Power plc, where
he developed and implemented policy for risk management of their UK assets as
well as leading the technical due diligence for significant international
acquisitions such as Hub, a 1,200 MW oil-fired plant in Pakistan, and Marmara, a
500 MW combined cycle power plant in Turkey. Recently, he led business
development at Lloyds' Register power division (subsequently Ingenco) and
advised developers on renewable energy projects. At IPC, he is responsible for
operations and maintenance activities and supervising technical due diligence
for proposed acquisitions and greenfield development in Latin America and
Central Asia.
Elizabeth Shaw, Director of Finance, aged 44, has been involved in the
electricity sector since 1994.
Between 1994 and 2000, as a director of Fieldstone, she advised on a number of
mergers, acquisitions and disposals in the electricity industry, both in the UK
and in developing markets. In Bolivia, she advised on the spin-off of the
Electropaz distribution business of Compania Boliviana de Energia Electrica S.A.
to Iberdrola S.A. of Spain and on the sale by ENDE of its electricity
distribution interests in Cochabamba. Prior to joining Fieldstone, Elizabeth was
extensively involved in the financing of small-to-medium sized companies in the
UK, including raising equity for both listed and unlisted companies. Currently
she is responsible for business development and finance at IPC. She is a
graduate of Exeter University.
Francis Mattos, Non-Executive Director, aged 72, has over 40 years' broad-based
power sector engineering and management experience, initially as a senior
manager with the Central Electricity Generating Board. In 1984 he was seconded
to British Electricity International (BEI), where he became director of overseas
business and project development. On privatisation of the U.K. electricity
sector, BEI became National Power International with a focus on international
utility acquisitions and power plant construction projects.
Projects included the acquisition in 1993 of the Pego power station in Portugal,
then the largest, privatised, power project in Europe. Recently he was an
adviser to Sithe Energies, Inc. and is a consultant to the World Bank. He has
written and presented papers on power system economics and control, tariffs,
substation switching, planning and operations reliability standards. He is both
a Chartered Engineer and a Chartered Manager. On 19 July 2004 the Company passed
a resolution at an extraordinary general meeting to approve his appointment as a
Director notwithstanding that he has attained the age of 70, in accordance with
section 293(5) of the Act.
Lock-ins and orderly market arrangements
Following Admission, the Directors (and companies connected and/or associated
with them) and certain senior management will be interested, in aggregate, in
4,650,000 Ordinary Shares representing approximately 21.8 per cent. of the
Enlarged Share Capital. Under the terms of the Lock-in Agreement each of the
Directors and their connected persons, save in certain limited circumstances,
will not dispose of any interest in any Ordinary Shares held by them for a
period of twelve months from Admission other than with prior written consent of
both the Broker and Nominated Adviser and for a further twelve months, only
having consulted the Broker and Nominated Adviser, or the Company's then broker
and nominated adviser, so as to ensure the maintenance of an orderly market in
the Ordinary Shares.
Dividend policy
The Company has not paid any dividends since its incorporation. The Directors
intend to commence the payment of dividends only when it becomes commercially
prudent to do so, having regard to the availability of the Company's
distributable profits and the retention of funds required to finance future
growth. In the medium term the Directors intend that dividend income will be a
significant source of shareholder value.
Extraordinary General Meeting
At an extraordinary general meeting of the Company which is to be held at 10.00
a.m. on 29 July 2005. The EGM Resolutions will provide as follows:
(a) to approve the Acquisition;
(b) to increase the authorised share capital of the Company from £600,000 to
£850,000 by the creation of a further 12,500,000 Ordinary Shares;
(c) to authorise the Directors to allot (i) new Ordinary Shares pursuant to the
Placing; (ii) new Ordinary Shares pursuant to the Warrants; and (iii) otherwise
up to a maximum nominal amount of £128,100 (representing approximately 30 per
cent. of the Enlarged Share capital of the Company;
(d) to authorise the Directors to allot equity securities for cash as if the
statutory pre-emption rights set out in section 89 of the Act did not apply to
enable the directors to allot the new Ordinary Shares pursuant to the Placing;
pursuant to rights or other offers and otherwise up to a maximum nominal amount
of £21,350 (representing approximately 5 per cent. of the Enlarged Share Capital
of the Company).
A circular comprising an admission document under the AIM rules, which includes,
inter alia, a section on Risk Factors will be sent to Shareholders today. This
will include a Notice of an Extraordinary General Meeting of the Company to be
held on 29 July 2005, together with a form of Proxy.
Enquiries:
Peter Earl 020 7793 7676
Rurelec PLC
Paul Shackleton
Daniel Stewart & Co PLC 020 7374 6789
Christian Dennis
Hichens Harrison & Co. plc 020 7588 5171
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
'Acquisition'
the acquisition of Patagonia Energy pursuant to the Acquisition Agreement
'Acquisition Agreement'
the conditional agreement between Basic and Rurelec for the acquisition by
Rurelec from Basic of fifty per cent. of the issued share capital of Patagonia
Energy
'Act' or 'Companies Act'
the Companies Act 1985, as amended
'Admission'
the re-admission of the Existing Ordinary Shares and Investor Warrants to
trading on AIM and the admission of the Placing Shares to trading on AIM
becoming effective in accordance with the AIM Rules
'AIM'
the market known as 'AIM' operated by the London Stock Exchange
'AIM Rules'
the rules for AIM companies in force at the date of this document issued by the
London Stock Exchange
'Articles'
the articles of association of the Company
'Basic'
Basic Energy Limited, a company organised and existing under the laws of the
Bahamas
'Board'
the board of directors of the Company, including a duly constituted committee of
such directors
'BP plc'
BP plc a company registered in England under registration number 00102498 whose
registered office is at 1 St James's Square, London SW1Y 4PD
'Broker' or 'Hichens Harrison'
Hichens, Harrison & Co. plc
'Broker Warrants'
75,000 warrants issued to Hichens Harrison on 18 August 2004 to subscribe for
75,000 Ordinary Shares at a price of 40 pence per Share
'CAMMESA' Compania Administradora del Mercado Mayorista Electrico S.A., the
Wholesale Power Market Administrative Company which is the corporation in charge
of the administration and coordinated operation of MEM and MEMSP according to
established guidelines. Its members are the national government of Argentina and
four associations representing the generators, the transmission companies, the
distributors and the marketers.
'Camuzzi'
Camuzzi Argentina S.A. a company registered in Argentina whose principal office
is at Sede Central, Buenos Aires, Argentina
'Capime'
Capime Ingenieria S.A. a company registered in Argentina whose principal office
is at Talcahuano 736-7mo, Piso, Buenos Aires, Argentina
'Combined Code'
the 'Combined Code on Corporate Governance' published in July 2003 by the
Financial Reporting Council
'combined cycle'
a combined cycle generator passes the hot exhaust gas from a gas turbine through
a heat exchanger which produces steam to drive a secondary turbine
'CREST'
the computerised settlement system (as defined in the CREST Regulations)
operated by CRESTCo which facilitates the transfer of title to shares in
uncertificated form (as defined in the CREST Regulations)
'CRESTCo'
CRESTCo Limited
'CREST Regulations'
the Uncertificated Securities Regulations 2001 (SI 2001/3755)
'Daniel Stewart'
Daniel Stewart & Co plc, the Company's nominated adviser
'Development Funding'
funding provided for the purpose of financing a development programme either in
the form of a grant, or as a loan at a concessionary rate of interest and/or
with a longer term, than would normally be achieved on a commercial basis
'Directors'
the directors of the Company.
'EGM'
the extraordinary general meeting of the Company convened for 10.00 a.m. on 29
July 2005
'EGM Resolutions'
the resolutions set out in the Notice of the EGM
'Enlarged Share Capital'
the Ordinary Shares in issue immediately following Admission (excluding any
Ordinary Shares that may be issued pursuant to the exercise of any Warrants
prior to Admission)
'ESA'
Energia para Sistemas Aislados S.A., a company registered in Bolivia under
registration number 107752 whose principal office is at Av. Brasil, Esquina 3_
Anillo, Santa Cruz, Bolivia
'EDS'
Energia del Sur S.A, a corporation duly incorporated and existing under the laws
of the Republic of Argentina, domiciled at Alicia Moreau de Justo 2050, 3rd
floor, office 307, City of Buenos Aires,Republic of Argentina
'Electrica'
Electrica del Sur, S.A., a corporation duly incorporated and existing under the
laws of the Republic of Argentina, domiciled at Alicia Moreau de Justo 2050, 3rd
floor, office 307, City of Buenos Aires, Republic of Argentina
'ENDE'
Empresa Nacional de Electricidad, the former integrated electricity utility
owned by the Bolivian state
'Executive Directors'
Peter Earl, Mike Eyre and Elizabeth Shaw
'Existing Ordinary Shares'
the 12,600,000 Ordinary Shares in the capital of the Company in issue
'FSMA'
the Financial Services and Markets Act 2000
'GDP'
gross domestic product
'Grant Thornton'
Grant Thornton UK LLP of Grant Thornton House, Melton Street, Euston Square,
London NW1 2EP
'Group'
the Company and its subsidiary undertaking
'Guaracachi'
Empresa Electrica Guaracachi, S.A., a company registered in Bolivia under
registration number 08-035910-03 whose principal office is at Av. Brasil,
Esquina 3_ Anillo, Santa Cruz, Bolivia
'interconnected system'
a national electricity transmission network covering part or all of a country
'Investor Warrants'
1,000,000 warrants issued by the Company, on 18 August 2004 to subscribe for
1,000,000 Ordinary Shares
'IPC'
Independent Power Corporation PLC a company registered in England under
registration number 3097552, whose principal office is at 5th Floor, Prince
Consort House, 27-29 Albert Embankment, London SE1 7TJ
'IPOL'
Independent Power Operations Limited, a company registered in England under
registration number 4288901, whose registered office is at 5th Floor, Prince
Consort House, 27-29 Albert Embankment, London SE1 7TJ
'isolated electricity system'
a local electricity network which is not connected to the Interconnected System
'Jenbacher'
GE Jenbacher 616 gas engines capable of generating 2 MW of continuous power
'Lock-In Agreements'
the conditional agreements governing the disposal of Ordinary Shares by the
Directors and others.
'London Stock Exchange'
London Stock Exchange plc
'MEM'
the MEM is the wholesale electricity market in the Argentine electricity market
and is administered by CAMMESA. The participants in the MEM are the generators,
the distributors, the transmission companies, the large consumers (more than 50
KW) and the marketers. The MEM consists of both a contract and a spot
market.
'MEMSP'
the MEMSP is the Southern Patagonian wholesale electricity market which is
administered by CAMMESA. The participants in the MEMSP are the generators, the
distributors, the transmission companies, the large consumers (more than 50 KW)
and the marketers active within the isolated southern system. The MEMSP consists
of both a contract and a spot market.
'MW'
mega watt, a measure of power (in this announcement electric power)
'Non-Executive Directors'
Jimmy West and Frank Mattos
'Official List'
the Official List of the UKLA
'open cycle'
a gas turbine in open cycle discharges the hot exhaust gas into the atmosphere
(see combined cycle)
'Ordinary Shares'
ordinary shares of 2 pence each in the capital of the Company
'Patagonia Energy'
Patagonia Energy Limited a company registered in the British Virgin Islands
under registration number 620522, whose registered office is at the offices of
Walker (BVI) Limited, Walkers Chambers, P.O. Box 92, Road Town, Tortola, British
Virgin Islands
'Patagonia Group'
Patagonia Energy and its subsidiary undertakings
'Patagonia Shareholders' Agreement'
the conditional agreement between Basic, Rurelec and Patagonia Energy relating
to certain rights and obligations in respect of the shares in the capital of
Patagonia Energy.
'Placees'
the subscribers of Placing Shares pursuant to the Placing
'Placing'
the conditional placing by Hichens Harrison on behalf of the Company of the
Placing Shares pursuant to the Placing Agreement
'Placing Agreement'
the conditional placing agreement dated 6 July 2005 between the
Company, the Directors, Daniel Stewart and Hichens Harrison
'Placing Price'
40 pence per Placing Share
'Placing Shares'
the 8,750,000 new Ordinary Shares which are the subject of the Placing
'Power Purchase Agreement'
a long-term agreement to purchase power
'Prospectus Rules'
the Prospectus Rules of the UKLA
'Rurelec' or the 'Company'
Rurelec PLC
'Resolution'
Resolution 406/2003 issued by the Argentine Secretariat of Energy in September
2003
'Services Agreement'
the shared services agreement dated 23 July 2004 between the Company and IPC
'Shareholders'
holders of Ordinary Shares
'thermal generator'
a generator whose source of energy is the combustion of hydrocarbons
'UKLA'
the Financial Services Authority, acting through the United Kingdom Listing
Authority, in its capacity as the competent authority for the purposes of Part
VI of FSMA
'USA' or 'United States'
the United States of America, its territories and possessions, any State of the
United States of America and the District of Columbia
'Warrants'
the Broker Warrants and the Investor Warrants
This information is provided by RNS
The company news service from the London Stock Exchange