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LONDON (Alliance News) - IPSA Group PLC said Thursday that Rurelec PLC has paid EUR1 million that IPSA owed to Ethos Energy on the company's behalf, and has made a proposal on the timing of further payments still due to IPSA.
Rurelec has proposed to pay Ethos Energy a further EUR1.5 million before the end of September 2015, and the balance of around EUR355,000 by the end of October. These payments would make up part of the payment that Rurelec owes IPSA as a deferred consideration for the sale of its Westinghouse Siemens gas turbines to Rurelec.
If Rurelec settles these amounts with Ethos Energy, the remaining balanced owed to IPSA by Rurelec will be GBP265,000, which is expected to be paid by the end of October 2015.
IPSA says that arrangements to pay the final EUR2.6 million it is due to pay Ethos is subject to discussion between the three parties. It is also still in talks with Radix Investments Ltd over the extension or refinancing of a GBP500,000 loan plus interest it owes.
The company reiterated that its working capital is tight and is being carefully managed, and it remains reliant on receiving the remaining funds owed by Rurelec.
It also will need to raise further funds to in the near term to meet the payments it owes to Ethos, to meet remaining creditors, and for working capital. IPSA plans to sell the remaining balance of plant in relation to previously sold turbines, as well as a minority interest in its operating subsidiary Newcastle Cogeneration Pty Ltd, but said there can be no certainty it will be successful in raising these funds.
The company has been in dispute with Iris Ecopower SDN Bhd over a non-refundable deposit after Iris failed to complete the purchase of turbines in 2012, and the Malaysian Courts have ruled twice in favour of IPSA in the past. A hearing date of November 3 has been set for a final appeal by Iris in the dispute.
Shares in IPSA were untraded Thursday. It last closed at 1.78 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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