Member Info for optimist13

Can now get a quote for 100k at 1.40p, but interestingly, being offered 1.32p to sell. I have the feeling it is going to be a good Christmas for shareholders, with some value being restored once the company updates the market. Hopefully, we should hear something next week once the exact terms of the currency restriction removal/easing are known.

listened not listed

The inauguration speech by Marci tomorrow will be listed too by many people across the world. Whilst from a selfish point of view, I want to hear about the relaxation of currency controls, the implications for the people of Argentina are colossal. The more I have read over the last couple of months, the more I realise that the downward economic spiral must be reversed. It will not be without pain, but it it is a necessary step. Good luck to the people of Argentina and good luck to the long-suffering Rurelec shareholders.

http://yaledailynews.com/blog/2015/12/09/bereciartu-why-look-to-argentina/ Extract: "Why is it important to pay attention to this change? As the second largest economy in the South America and a member of the G-20, Argentina has shown with its recent elections that it is tired of populism at the expense of democracy and prosperity. Argentina might now be facing a significant resurgence and also inspire a continental shift away from misguided and myopic populism, serving as a model for other Latin-American nations. Yale students in particular should care about this possibility. Many of you will pursue careers in international relations that will require an understanding of South America’s complex economic and political dynamics. Given Argentina’s new path, the South American continent will likely prove an increasing source of economic development and business opportunities as well."

Interesting trades near the close of play with over the asking price being paid. After the close a trade of 150k at 1.25p could have been a buy or sell. In any event, it looks like the rise will continue tomorrow.

It is widely anticipated that the Peso will be devalued against the Dollar when, amongst other things, the currency restrictions are lifted. It is here that I need the help of an accountant. Am I right in thinking that as the loans to EdS were in either dollars or pounds, the value of the loans will not diminish following a devaluation. Conversely, the value of any profits to Rurelec from EdS will be less when converted.

by the MM's now. The spread has now been opened so the buys look like sells. Laughable.

At the risk of being shot down in flames, I see the share price increase being merely the shortage of available shares on the sell side. In my opinion, the 'open offer' was a complete stitch up, and parties tried to take advantage of the Sterling Trust administration to give external investors an opportunity to buy shares at a significant discount to the underlying value of the company. The share price was driven down by the MM's in the knowledge, or so they thought, that there would be any amount of shares at the offer level, but now there are none. Add to this the promise by Marci that one of the first things he will do on taking office will be to remove/relax the current currency controls, then you have the making of a perfect bear squeeze. The company have stated we are due circa $1m on the completion of the sale of assets in Peru, which will pay off the short term loan. Given the unexpected change of events in Argentina, I expect there to be considerable interest from investors to either take a stake in EdS or for a deal to be done with the loan book. Rurelec are not bankers and it would be appropriate to sell on the loans and use the money to develop the other assets the company has.

Leicesterboy - my apologies, I was referring to the open offer which as you say could not go ahead as the capital restructuring was voted down.

For any potential new investors, the extract below taken from the recent placing announcement confirms the significant financial positive impact from a relaxation of the currency controls in Argentina. It is widely expected that the new president will announce the plans for the lifting of currency restrictions when he takes office on Thursday. "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."

Flightman - I don't think we will see any re-rate until the company announces how they are addressing the funding gap. However, Thursday will be significant because Marci will probably give an indication and time frame for the removal/lifting of the currency controls. In my opinion, this notification will give RUR a lot more options than it has currently for bridging the gap.

Good article from the American Enterprise Institute: https://www.aei.org/publication/argentinas-road-to-recovery/ Extract: Key Points Mauricio Macri, who will become Argentina’s president on December 10, is moving decisively to apply free-market solutions to restore his country’s prosperity, solvency, and global reputation. Success of Macri’s center-right agenda could serve as an example for many Latin American countries whose statist policies have produced ailing economies and political instability. As Argentina recovers its influence in favor of regional democracy and human rights, the United States must step forward to support these causes in the Americas. Read the PDF.

Just got back from my afternoon walk and pondering over how the company will find the funds in lieu of the aborted placing. As I have posted previously, the funding represented a discount of something like a 88% discount to the net assets. On Thursday, Marci will confirm the plans for the easing of the currency restrictions. When that happens, the value of our assets there should increase and make them more saleable. If the company had too, I am sure they could sell the loans at a discount to the book value and existing shareholders will still be much better off than if the placing had gone ahead. Reading through the various press reports today, it appears that investors are looking to buy distressed assets in Argentina, and you cannot get much more distressed than Sterling Trust who are in administration. Their 53% holding in Rurelec should be worth a lot more after Thursday as well and I am sure they will under the radar of companies wishing to have a bigger presence in Argentina. Time for a cup of tea now!

Can only buy 100k at the full ask of 1.15p currently. The share price should never have been dropped to the current levels, and news from the BOD on their understanding of the lifting of the currency restriction, when announced, should improve sentiment. The fall in the price of oil and gas must also be helping the bottom line for EdS. After all, they are gas generators.

Flightman - there are no shares available. It is the simple law of supply and demand in my view. The MM's and the bears were expecting a placing at 1.00p and it has not happen and will not happen. The election result in Argentina has caught many off guard and from a business perspective, the outlook there is now a whole lot rosier. From Rurelec's perspective, it now looks like the company will be able to access the outstanding loan and interest payments if the lifting of currency restrictions are announced on Thursday. At the half year, the company announced impairments to the EdS loans. The impairment may well now be reversed, which gives us a NAV of circa 8.00 to 9.00p. Thursday is a very important day for the company and it could well herald the end of the downward spiral in the company's fortunes.

Another one: A great number of US corporations will be reinvesting in Argentina', forecasts ambassador Mamet United States ambassador to Argentina, Noah Mamet, in a lengthy interview with the La Nacion daily, praised the election of Mauricio Macri and figures of his cabinet and stressed that the US government was anxious to begin working together. http://en.mercopress.com/2015/12/07/a-great-number-of-us-corporations-will-be-reinvesting-in-argentina-forecasts-ambassador-mamet

Good article: http://en.mercopress.com/2015/12/07/argentina-talks-to-us-treasury-secretary-lifting-dollar-clamp-depends-on-level-of-reserves Extract: Prat-Gay, one of the members of the six-man strong economic cabinet that Macri has established, spoke with Lew by phone on Friday and later Prat-Gay’s associates expressed that the meeting had been 'very productive' and that it was just the first step in a broader campaign to increase cooperation and to “normalize” relations between Buenos Aires and Washington in this arena. The US Treasury is reportedly keen to establish a productive relationship with Macri’s economic team.

Can't buy any shares online at the moment. With the right announcement on Thursday, we could see a good old bear squeeze. We have £10m outstanding in loan payments and interest from EdS. We may not be able to get all of it immediately, but, even the easing of the restrictions will allow for an orderly repayment schedule sufficient to meet the working capital needs. The final $1m from the sale of the Peru assets will also help.

http://www.theaustralian.com.au/news/world/argentine-political-change-an-optimistic-move-for-investors/news-story/6f04e31ddf88905e3765d8bb4d9f7bd5?= Have just come across this article. A few days old now, but relevant from an investor perspective. Lots of new articles online today, and expect to see a few more fireworks this week from the incumbent. The formal announcement of the lifting of currency controls, probably on Thursday, will be very beneficial for Rurelec. Just one buy today so far, but even that has moved the price up.

A well balanced article from Forbes: http://www.forbes.com/sites/afontevecchia/2015/12/03/be-wary-of-the-argentina-trade-new-president-macri-faces-more-challenges-than-opportunities/