LONDON (Alliance News) - IPSA Group PLC on Friday said that a gas turbine at its power plant in Newcastle, KwaZulu Natal in Southern Africa has experienced mechanical failure, and that the company may go into administration as a result of the cost burden.
The problem will lead to reduced output of five megawatts until repairs can be made, IPSA said.
The cost of repairs will be around GBP300,000, and IPSA has lodged an insurance claim. It intends to replace the core of the turbine initially with a leased unit, which will return the turbine to service within one month.
IPSA said its working capital remains "extremely tight" and that it is possible the company may go into administration, even if the insurer settles the claim.
Shares in IPSA were untraded on Friday, last quoted at 1.50 pence.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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