Short Term Loan Facility

RNS Number : 7569A

Rurelec PLC

24 December 2014

 



24 December 2014                                                                

Rurelec PLC

("Rurelec" or "the Company")

Short Term Loan Facility

Heads of Terms Signed for Argentine Cash Release and Expansion

The Directors of Rurelec PLC (AIM: RUR), the owner, operator and developer of power generation capacity internationally, are pleased to announce that the Company has entered into short term loan agreements with Radix Investment UK Limited ("the Radix facility" or "the facility") in an amount of £3.05 million. This facility, which has been partly drawn today with the balance to be drawn in January, permits Rurelec to make final payment to IPSA Group PLC under the June 2013 contract to acquire two Westinghouse Siemens 701DU gas turbines for its Illapa generation project in Chile.

The Radix facility is for a three month period expiring 31 March 2015 and is expected to  be repaid from the proceeds of the sell down of project interests as part of Rurelec's programme of partnerships in Latin America. The facility carries an annualized interest rate of 6 per cent and is secured.  Rurelec has also agreed to issue Radix 16.8 million warrants to subscribe for new Ordinary shares in Rurelec at an exercise price of 7.3 pence per share expiring 24 December 2016.

The partnership transactions now being negotiated each assume the sell down of a share stake in one of the Group's regional holding companies or project companies. Outline terms have now been agreed for the sell down of interests in Chile and Peru with detailed binding agreements expected to be entered into and announced early in 2015.

 Rurelec has entered also into heads of terms for a transaction intended to release and repay in US dollars the bulk of the Company's project loans to its Energia del Sur combined cycle gas turbine power plant in Argentina.  If this transaction is concluded, Energia del Sur is also expected to initiate a plant expansion programme under a new Resolution 220 contract to install a new open cycle gas turbine under the supervision of Rurelec's Independent Power Corporation project development subsidiary.  A further announcement will be made in due course in the New Year.

Commenting on the loan and the developments in Argentina, Peter Earl, CEO of Rurelec said:

"Shareholders have been patient in waiting for us to announce our partnership arrangements.  Given the complexity of the issues involved and the strong interest from competing suitors, it has taken longer to arrive at binding agreements than we would have wished.  However we believe that the waiting will be worthwhile. In the meantime the Radix facility will permit us to accelerate the arrival of the Illapa turbines in Chile."

For further information please log onto our website at www.rurelec.com or contact:

Peter Earl, CEO, Rurelec PLC Ana Ribeiro, Capital MSL	Tel: [phone] Tel: [phone]
James Joyce, Paul Shackleton and James Bavister W.H. Ireland	Tel: [phone]

 

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