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Rurelec Chief To Leave With IPC Subsidiary As Annual Loss Narrows

Fri, 19th Jun 2015 08:48


LONDON (Alliance News) - Rurelec PLC Friday said Chief Executive Officer Peter Earl is stepping down and will take its Independent Power Corp subsidiary with him, as the provider of power generation in Latin America posted a narrowed pretax loss for 2014.

Earl will buy the IPC business for a nominal sum after all its assets and liabilities have been repositioned into Rurelec. The company said that Earl's departure will take IPC and over GBP500,000 of overheads out of Rurelec.

Andrew Morris, the former chairman and current finance director, will take up the position of chief executive.

The company said that Earl and IPC are entering into consultancy agreements with the company to maintain continuity and ensure a smooth handover for the next stage of its planned return to being a dividend-paying company.

Rurelec has had a tough time since its Bolivian assets were nationalised. It was paid a much lower settlement by Bolivia than it had expected, which has left it with less funding available to direct towards new projects.

As a result it has opted to sell its hydro development business in Peru, and is now focusing on its clean tech gas projects in Argentina and expanding its projects in Chile.

The company said that its activities in Chile were slowed by the change in government which led to all projects being called in for review. Its process of selecting a long-term equity partner for its projects in Chile was hit by these delays, but Rurelec said these issues have now been largely overcome, and it expects more rapid progress in the future.

Rurelec posted a pretax loss of GBP2.9 million for 2014, narrowed from a pretax loss of GBP36.4 million a year before, which had been due to exceptional costs related to the Bolivian arbitration, and revenue fell to GBP303,000 from GBP5.4 million.

Rurelec also said Friday it has signed a bridging loan facility of USD12 million against the anticipated sale of the Peru hydro projects, and has settled terms for a one year strategic loan with an undisclosed South American power company. This will allow it to settle a deferred payment to IPSA Group PLC and repay other outstanding obligations, and is part of a wider cooperation with the South American company.

It expects to repay all loans from the sale of the Peruvian hydro portfolio, but has contingency plans for repayment from other sources if the sale is delayed.

Shares in Rurelec are trading down 20% at 2.70 pence Friday morning.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

Copyright 2015 Alliance News Limited. All Rights Reserved.

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