Member Info for optimist13

Bloomberg article: http://www.bloomberg.com/news/articles/2016-01-12/argentina-seeks-to-end-legal-conflict-with-creditors-macri-says

Also on the BBC business news live feed: http://www.bbc.co.uk/news/live/business-35262037 Argentina debt deal Posted at 13:55 Argentina and a group of investors are still in dispute about a debt restructure. Investors are suing the country, which wants more favourable terms to repay what it owes. "The nation will tell a mediator brokering debt negotiations that it wants to resolve the matter, President Mauricio Macri has said. He told a news conference that Argentina sought a "reasonable" deal. Talks will resume on Wednesday."

Also on the BBC business news live feed: http://www.bbc.co.uk/news/live/business-35262037 Argentina debt deal Posted at 13:55 Argentina and a group of investors are still in dispute about a debt restructure. Investors are suing the country, which wants more favourable terms to repay what it owes. "The nation will tell a mediator brokering debt negotiations that it wants to resolve the matter, President Mauricio Macri has said. He told a news conference that Argentina sought a "reasonable" deal. Talks will resume on Wednesday."

Key talks this week with the vulture funds. An agreement on repayment should give a lot more headway to secure foreign investment in the Country. http://en.mercopress.com/2016/01/11/argentina-s-financial-agenda-talks-with-holdout-funds-and-farmers-dollars Extract: " Finance Secretary Luis Caputo will travel to New York and meet with court-appointed mediator Daniel Pollack and representatives from the so-called holdout or “vulture” funds. The talks would mark a major breakthrough in the dispute, which has kept Argentina largely shut out of international capital markets. President Macri’s administration has long said that settling the debt issue with the holdout bondholders would be a priority for his administration as it is the key to boosting economic growth."

A decent buy has gone through for 400k shares. Not many left of the 2.8m that were sold on the 5 Jan. A couple of decent buys should see the price climbing back up. The charts would also indicate further moves to the upside.

NMH19 - the Argentinian government have announced an 'energy crisis', which allows them sweeping powers to implement change rapidly. They have already stated that the current subsidies will be removed/reduced for households, and I am sure they will shortly announce new measures to improve the returns for power producers. If my understanding is correct, the previous government, through the various tariff schemes, made it very difficult for firms to make any meaningful profit from their operations. EdS is a very efficient plant, and improvements to the tariff payments should feed directly to the bottom line. This in turn will allow for further sums to be repatriated. The administrators for Sterling Trust gave themselves one year to dispose of all the assets. Whilst I don't think it will take that long to sell the 54% stake in Rurelec, I also believe that the value of the assets in Argentina will continue to improve as the new government roll out the new pro-business initiatives. Quite happy to wait for the news, as I see a minimum sale of the Sterling Trust shares at 3.5p, but it could easily be 5.00p.

Flightman - Happy New Year to you as well. You must have been on holiday judging by your lack of posts. Not sure if we will see an announcement any time soon with the Radix loan being extended by a further six months. I think the Sterling Trust administrators are holding all the cards at the moment and the selling of the 54% stake in Rurelec will be the catalyst for any meaningful news. Meanwhile, the news coming out of Argentina bodes well for Rurelec, particularly regarding the repatriation of money on loans and interest made to EdS.

Extract from announcement this morning from President Energy http://www.investegate.co.uk/president-energy-plc--ppc-/rns/argentina-update/201601070700060826L/ "The new Administration also intends to increase the amount of US dollars that can be paid out of Argentina to repay foreign originated loans held by companies working in the country, subject to qualifying conditions. The limit has increased from $50 thousand per month to $2 million."

Interesting comment within an inflation report: http://www.buenosairesherald.com/article/206103/gov%E2%80%99t-inflation-below-25 "A factor which could make it harder for the government to reach the 20-to-25-percent goal is that of rising utility charges, as Energy Minister Juan José Aranguren said hikes on electricity and gas will start in less than two months."

Just re-reading my post and would clarify that it is Rurelec who have given the loans to EdS and PEL. With any luck, the company will receive the £3.9m from EdS that it impaired at the half year, which will greatly assist cash flow and improve the balance sheet.

Whilst the company has the short term loan with Radix, if I am reading the accounts correctly, the company also has a 'first charge' against the assets on loans it has to both EdS and PEL. The interest rates on the loans vary from 12 to 16% per annum. Still awaiting news from the new government on how they are going to incentivise investors into building power generation capacity, but IMHO it all bodes well for Rurelec going forward.

YtiliBAb0rP - you state that the company is "barely operational at the moment", but this to me diminishes the importance of the assets in Argentina. In the open offer document Mark Keegan had this to say about the asset: "Argentina The Board intends to maintain its ownership of its principal asset in Argentina. The Directors note recent press speculation that the next year may see very important changes in currency and capital controls in Argentina, which could reverse the difficulties of the past few years during which the Company has been unable to repatriate sums in respect of repayments of interest and capital on approximately $40 million of loans which it extended to construct the combined cycle plant. Eds now produces annual gross revenues of approximately $27 million, although current exchange controls in Argentina place certain restrictions on transferring funds from Argentina back to Rurelec PLC." With the implemented changes in Argentina, even allowing for the devaluation of the Peso, the value of the business and the loan book have now been transformed. With the right direction, this could be transformational for the other assets we hold. I understand that up to $2m dollars can be repatriated per month, which would be more than sufficient for the company to move forward if the statements made in the open offer stand up to scrutiny. The buyer of the Sterling Trust block will be able to appoint their own directors, and I feel pretty confident they will have a clear strategy of how best to develop the company going forward.

Whilst we are floundering in the dark trying to establish exactly what the current position is with Rurelec, the administrators of Sterling Trust will not have that problem. Speaking for 54% of the company, I am sure they will have access to the books of Rurelec and a complete understanding of the inter-connectivity between the associated companies and the loan provider. The 'Statement of administrator's proposals' for Sterling Trust alluded to 'interested parties' for the quoted investments, and given the turn of events in Argentina, I can see further interest coming forward. However, any buyer will need to know the current position of the loans to EdS, any arrangements with Patagonia Energy Limited, who hold the other 50% stake in EdS, and what is happening with the other projects. From my sweep of the latest news coming out of Argentina, it appears to be good news as far as our investment there is concerned. The currency controls have been lifted, a 'energy crisis' has been implemented, and price caps for electricity are being lifted. The government want to attract investors, but this will not happen if an acceptable return is not achievable. If my understanding is correct, any buyer of the Sterling Trust shares will have to offer at least the same price to other shareholders if they wish to complete a full takeover. The administrators have a 'duty' to achieve the best outcome for the creditors, which in this scenario, is also in the best interests of all Rurelec shareholders. It is extremely frustrating that the remaining directors of Rurelec have not sought to issue any further communication to shareholders since the resignation of Mark Keegan. There is clearly plenty going on in the background, given that the apparent urgency to raise funds is suddenly not a major issue. Yes, the Radix loan has been extended, but the company now appears to have sufficient working capital for the time being. I sincerely hope for the sake of long term holders that any impropriety by current or former directors is looked into and legal action taken if deemed necessary.

Interesting that you raise the possibility of Rurelec going into administration. The administrators of Sterling Trust have a value of circa £14m for the sale of the 54% holding in Rurelec. Rurelec can now access the outstanding loan repayments and interest from EdS which have hitherto been blocked, so any perceived threat of administration is receding fast. I have KAMEL on filter so I do not know what he is posting. Your posts however, with the negative connotations, sound very similar to his.

YtiliBAb0rP - Thanks for the links, but unfortunately I cannot seem to open any of them or find the information you allude to on Companies House. In relation to Rurelec, what is the point you are making. I understand that the Sterling Trust issues may be complex and indeed the background to Radix investments, but I don't see how this affects Rurelec or their current investments and outlook. The administrators of Sterling Trust will sell the 54% holding in Rurelec for the best possible price and it would appear they expect to receive substantially more that the share price today. The changes in Argentina should allow the company to repatriate outstanding loan and interest payments from EdS over the coming months which will facilitate the repayment of the Radix loan, plus funding ongoing working capital requirements. I see this is your first post here. Are you invested in Rurelec or one of the other companies you mention in your post.

goodflyingduck - I don't think everyone would have taken it as given that the loan would be extended, hence the buys today. I would agree that the Sterling Trust administrators will be calling the shots given the 54% holding, and at least we now have an impartial body making sure the best outcome is achieved for shareholders/creditors. With the departure of directors from Rurelec and the closing down of the London office, there will be considerable savings in the overhead expense. I agree that it is a very poor show that the company has not given any sort of update or timeline going forward. What appals me is the lack of an update on the assets in Argentina. The new Government have instigated new policies which greatly assist Rurelec in the repatriation of monies, yet they are staying very quiet on the subject.

Well, my reading of the situation is that there is no way the company will not be able to access sufficient repayments from EdS over the next 6 months to support the ongoing business requirements. Add to the pot the Sterling Trust administrators having 'interested parties' in the 54% holding in Rurelec with an expected realisable value significantly higher than the current share price, then I believe there is room for cautious optimism going forward.

23 December 2015 Rurelec PLC ("Rurelec" or the "Company") Extension of Short Term Loan Facility The Directors of Rurelec PLC (AIM: RUR), the owner, operator and developer of power generation capacity internationally, are pleased to announce that the due date for repayment of the short term loan agreement with Radix Investment UK Limited ("the Radix facility" or "the facility") for an amount of £600,000 which was fully drawn down in November has been extended to 30th June 2016. The Radix facility is secured by debenture over all of Rurelec's assets.

So, the loan has been extended by a further 6 months.

So, the new Government has declared an 'Electricity Emergency' until the end of 2017: http://www.argentinaindependent.com/currentaffairs/newsfromargentina/government-decrees-electricity-emergency- until-end-2017/ Reading the various reports, it would appear that the amount of money paid to generators of electricity will have to increase if the government want to see increased investment. The sector is in a critical state, and unless I am mistaken, EdS should benefit from the proposed changes. If the new Energy and Mining Minister - Juan José Aranguren, is serious about attracting investment in the sector then this must surely increase the value of our investment in EdS. Given the speed at which new policies are being introduced, I don't think we will have long to wait before we learn of the proposed changes.