Rurelec Regulatory News (RUR)

6 Jul 2005 17:19

Rurelec PLC06 July 2005 6 July 2005Rurelec PLC ("Rurelec" or the "Company") Placing of 8,750,000 Ordinary Shares at 40 pence per shareAcquisition of 50% interest in Patagonia Energy LimitedRe-admission to trading on AIM Rurelec PLC, the British company established to develop rural electrificationprojects in Latin America has entered into an agreement to purchase for cash a50 per cent. interest in Patagonia Energy, a company incorporated in the BritishVirgin Islands, from Basic. Patagonia Energy wholly owns directly (and indirectly through Electrica) EDS,which owns and operates a generating plant supplying electricity in the isolatedelectricity system of Southern Patagonia, Argentina. The generating plant wasbuilt in 1995 and comprises two General Electric MS6001B gas turbines in opencycle, capable of generating up to 77MW. The consideration of US $6 million in cash is payable in two or more tranchesdepending on the profitability of EDS. The first tranche is fixed at US$4.5million and is due upon Admission. The timing of subsequent payments of afurther US$1.5 million will vary according to the future profits of EDS. As aresult Rurelec and Basic will be joint venture partners in Patagonia Energy. The Company is proposing to raise approximately £3,500,000, before expenses,through the issue of 8,750,000 Placing Shares, to institutional and otherinvestors, at a price of 40 pence per Placing Share to finance the Acquisition.The Placing Shares will represent approximately 41.0 per cent. of the EnlargedShare Capital. At the Placing Price, the Company's market capitalisation onAdmission will be £8,540,000. Owing to its size, the transaction constitutes a "reverse takeover" for thepurpose of the AIM Rules and is conditional on shareholder approval. A circularcomprising an admission document under the AIM rules will be sent toShareholders today. This will include a Notice of an Extraordinary GeneralMeeting of the Company to be held on 29 July 2005, together with a form ofProxy. Enquiries: Peter Earl 020 7793 7676Rurelec PLC Paul ShackletonDaniel Stewart & Co. plc 020 7374 6789 Christian DennisHichens Harrison & Co. plc 020 7588 5171 Daniel Stewart & Co. plc, which is regulated by the Financial ServicesAuthority, is acting as nominated adviser to the Company. It will not beresponsible to any person other than the Company for providing the protectionsafforded to its customers or for advising any other person on the contents ofany part this announcement. The responsibilities of Daniel Stewart & Co. plc asthe Company's nominated adviser under the AIM Rules are owed solely to theLondon Stock Exchange and are not owed to the Company or any Director orShareholder or to any other person, in respect of any decision to acquireOrdinary Shares in reliance on any part of this announcement or otherwise.Daniel Stewart & Co. plc is not making any representation or warranty, expressor implied, as to the contents of this announcement. Hichens, Harrison & Co. plc, which is regulated by the Financial ServicesAuthority, is acting as broker to the Company. It will not be responsible to anyperson other than the Company for providing the protections afforded to itscustomers or for advising any other person on the contents of any part of thisannouncement. The responsibilities of Hichens, Harrison & Co. plc as theCompany's broker under the AIM Rules are owed solely to the London StockExchange and are not owed to the Company or any Director or Shareholder or toany other person, in respect of any decision to acquire Ordinary Shares inreliance on any part of this announcement or otherwise. Hichens, Harrison & Co.plc is not making any representation or warranty, express or implied, as to thecontents of this announcement. Background information on Rurelec Rurelec was established specifically to develop rural electrification projectsand isolated generation projects in Latin America and was admitted to trading onAIM on 18 August 2004. Rurelec's management team has experience in developinginternational power projects and specifically in the electricity sector in LatinAmerica. Acquisition of ESA Following flotation, Rurelec embarked on a programme of acquisitions of powerplant equipment, the first of which was the purchase of ESA from Guaracachi inOctober 2004. The consideration for the transaction was US$550,000 in cash. ESA is the owner of two 3 MW Worthington dual fuel motors. These are smallmachines which are suitable for rural generation. It is planned to redeploy themto Trinidad in Central Bolivia to supply electricity to the local isolatedelectricity system. These machines have been overhauled, dismantled and preparedfor installation in Trinidad utilising gas condensate. Acquisition of 9 Jenbachers In January 2005 Rurelec announced that it had acquired for cash nine Jenbacherengines, each with a gross generation capacity of 2 MW, for a total of £1million. Simultaneously, the Company sold six of these engines for the sum of £1million which left Rurelec with the three remaining Jenbachers, and gross profiton the transaction of £333,000. The remaining three Jenbachers are intended tobe installed in Yacuiba, Southern Bolivia, where gas supplies are available andshortages of power exist. Negotiations leading to the deployment of thesemachines are ongoing. Background information on Patagonia Energy The proposed Acquisition Subject to the passing of the proposed EGM Resolutions, Rurelec will acquire 50per cent. of the issued share capital of Patagonia Energy for consideration ofup to US $6 million in cash from Basic. The consideration is payable in two ormore tranches depending on the profitability of EDS. The first tranche is fixedat US$4.5 million and is due upon Admission. The timing of subsequent paymentsof up to a further US$1.5 million will vary according to the future profits ofEDS. As a result Rurelec and Basic will be joint venture partners in PatagoniaEnergy. As at 30 April 2005 Patagonia Energy had net assets of US$ 61,000 and inthe period from incorporation on 22 October 2004 to 30 April 2005 it reported anet operating loss of US$ 61,000. Financial information relating to PatagoniaEnergy and its subsidiaries is set out in the Admission document. The Patagonia Shareholders' Agreement determines how Patagonia Energy will bemanaged. Neither party will have control of Patagonia Energy. Both partners areable to appoint two directors to the board of Patagonia Energy and subsidiaries:Basic will retain the roles of Chairman and CEO of Patagonia Energy, and Rurelecwill appoint the Deputy Chairman and the Finance Director. Patagonia Energy directly (and indirectly through Electrica) wholly owns EDS, agenerating company located in Comodoro Rivadavia, whose only asset is CentralTermica Patagonia, a gas-fired power plant efficiently located near the centreof the isolated electricity system in southern Patagonia. Electrica is a nontrading intermediate holding company, which directly owns 60 per cent. of EDS. Patagonia Energy is currently owned by Basic, a Bahamian company withelectricity interests in the Dominican Republic. Patagonia Energy acquired EDSand Electrica in October 2004 from Xcel Energy, a large United Stateselectricity utility. EDS The generating plant was built in 1995 and comprises two General ElectricMS60001B gas turbines in open cycle, capable of generating up to 77MW. Onacquisition in October 2004 by Basic the generators were not operating havingbeen taken offline and mothballed on 15 June 2002 and 4 January 2003respectively. Patagonia Energy started recommissioning the units in November2004 and both units are now in full service, dispatching into the MEMSP.EDS has a forward contract of supply to sell 35MW of electricity to adistribution company, Sociedad Cooperativa Popular Limitada de ComodoroRivadavia. The contract is renewable annually, the first anniversary falling on1 May 2006. EDS sells the remainder of its output at the spot price into theMEMSP. Gas is supplied to the plant under a contract with Camuzzi expiring on 30September 2006, through a pipeline, which is also operated by Camuzzi. The costof gas is billed to EDS in Argentine Pesos and the price is regulated by EnteNacional Regulador del Gas (ENARGAS), the gas regulator. The gas industry inArgentina is in the process of reorganisation, splitting the activities ofsupply and distribution/transmission and this may lead to an increase in gasprices. EDS is obliged to seek an alternative gas supplier with effect from 1October 2006. However, a new contract with Pan-American Energy, an Argentinesubsidiary of BP plc, for the supply of gas is under negotiation and theDirectors do not anticipate difficulties in finding new gas suppliers asPatagonia is an area rich in gas. EDS envisage that it will continue to contractwith Camuzzi for the transport of gas even though it will be using analternative gas supplier. From June 2005, routine maintenance is undertaken by Capime, under an 18 yearcontract payable in US dollars. In addition to the provision of spare parts forplanned outages, Capime is also obliged to provide spares at cost on a just intime basis for forced outages. EDS pays a flat monthly fee plus a usage feebased on the number of hours each generating unit operates. Capime guaranteescertain operating performance parameters. The Argentine electricity market CAMMESA, the regulator for the wholesale electricity market is involved in thesettlement of electricity charges as follows: (a) Withholdings by CAMMESA of profits generated in the spot marketPursuant to the Resolution, EDS is paid for its operating cost (the regulatedfuel price plus an allowance for operations and maintenance determined byCAMMESA) but the revenue that exceeds this predetermined operating cost iswithheld by CAMMESA and settled as described in paragraph (c) below.In addition, EDS receives a capacity fee. (b) Withholdings by CAMMESA of profits generated under forward contracts Underthe forward supply contract with Sociedad Cooperativa Popular Limitada deComodoro Rivadavia, EDS invoices the customer and is paid directly. However, thetransaction is still subject to the Resolution and EDS is responsible for payingover to CAMMESA an amount equivalent to the difference between its operatingcost and the spot price. Such amount paid over to CAMMESA again is settled asdescribed in paragraph (c) below. (c) Use of CAMMESA retention Retentions by CAMMESA are divided into two tranches. 65 per cent. of theretention will only be released for investment in new generating capacity. EDSis analysing the feasibility of converting its units to combined cycle. If thisinvestment is undertaken before July 2007, this should result in the release ofwithheld funds to EDS, allowing it to recognise profits and benefit from moreefficient generation. The remaining 35 per cent. of the funds are withheld pending repayment at a dateas yet unspecified. (d) CAMMESA loan EDS has drawn down an interest bearing loan of Arg $4,760,000 from CAMMESA tofund recent maintenance and overhaul of the two generators. This loan will be repayable in 12 monthly installments commencing in June 2006. Assets owned on Admission On Admission Rurelec will own: • ESA, which in turn owns two Worthington dual fuel motors, 6 MW in aggregate;• three Jenbachers, 6 MW in aggregate; and• a 50 per cent. indirect interest in Central Termica Patagonia, a 77 MW gas-fired power plant in Patagonia, described above. Investment strategy The Directors' strategy is to continue to acquire, or invest in, companies withestablished electricity generating operations or generating assets suitable forredeployment in the rural electrification and isolated generation sectors inLatin America. The investment strategy of the Company may be extended in thefuture if appropriate opportunities to acquire or invest in generating assetsoperating on an interconnected system within Latin America are available. Furthermore, the Directors have identified opportunities to manage theimplementation phase of rural electrification projects as well as investing inthe generation assets that are required to satisfy the increased demandassociated with that expansion.Any generating capacity deployed by the Company will, wherever possible, besupported by Power Purchase Agreements expected to incorporate payments for bothcapacity and energy production. The Directors are keen to promote sustainable projects based on locally-producedfuel supplies and will, where practicable, promote the use of renewable fuelsfor electricity generation. Current trading and prospects ESA has commenced negotiations with fuel suppliers and ENDE in connection withdeploying the Worthington dual fuel motors to Trinidad in Central Bolivia. Themotors are in the process of being overhauled, dismantled and prepared fortransportation. Contracts for transporting the engines and for site preparationwill be signed only when fuel and offtake terms are known. Rurelec has also entered into a contract to dismantle the three Jenbacher unitscurrently located on the Isle of Wight with a view to their re-installation inYacuiba, Southern Bolivia and work has started. Negotiations for the fuel andofftake contracts have commenced. Further commitments will be delayed pendingagreement of the principal terms.Rurelec is also actively exploring expansion opportunities in areas of northernArgentina and is in negotiations with EDESA, the Salta electricity distributioncompany, for the provision of new small power units to meet the electricityshortages in Salta. Details of the Placing. The Company is proposing to raise approximately £3,500,000, before expenses,through the issue of 8,750,000 Placing Shares, to institutional and otherinvestors, at a price of 40 pence per Placing Share pursuant to the PlacingAgreement. The Placing Shares will represent approximately 41.0 per cent. of the EnlargedShare Capital. At the Placing Price, the Company's market capitalisation onAdmission will be £8,540,000. Following Admission, the Directors (and companies connected and/or associatedwith them) will hold, in aggregate, approximately 19.4 per cent. of the EnlargedShare Capital. The Directors are not subscribing for Placing Shares.The Placing Shares will rank pari passu in all respects with the ExistingOrdinary Shares. Dealings in the Placing Shares are expected to commence on 1August 2005. It is anticipated that CREST accounts will be credited on the dayof Admission and that certificates will be dispatched by first class post by 4August 2005. Directors Biographical details of the Directors are as follows: James West, Chairman and Non-Executive Director, aged 58. Following a successfulcareer as Managing Director of Globe Investment Trust plc, Jimmy West became theChief Executive of Lazard Asset Management and a Managing Director of LazardBrothers & Co. Ltd, where he held full responsibility for the bank's investmentoperations. He is now Chairman of Gartmore Fledgling Trust plc and JupiterSecond Enhanced Income Trust plc and is a non-executive Director of a number ofdiverse companies including Candover Investments plc, British Assets Trust plcand Global Natural Energy plc. Peter Earl, Managing Director, aged 50, began his career at the BostonConsulting Group advising state owned companies. He has advised ministries offinance and central banks in Abu Dhabi, Albania, Kuwait and Saudi Arabia. He isthe author of the standard European textbook on cross-border takeovers publishedby Euromoney. Formerly Chief Executive of Tranwood plc and The CarterOrganization Inc., in New York, he acted on secondment to the World Bank and theUnited Nations Development Programme, advising on privatisations in LatinAmerica and Eastern Europe, where he has served as Deputy Chairman for theUnited Nations Economic Commission for Europe infrastructure finance group. Hewas a director of Fieldstone Private Capital Group Limited ("Fieldstone") inLondon. In the mid-1990's, he advised on US$6 billion of cross-border powersector acquisitions and bids, involving 5,000 MW of installed capacity and morethan 2 million distribution customers. In 1995, he founded IPC which has owned,developed and operated 3,400 MW of power projects around the world including inKazakhstan, USA, Argentina and Bolivia. He is an Oxford University graduate andwas a Kennedy Scholar at Harvard University. John Michael Eyre, Director of Engineering, aged 51, is both a Chartered andEuropean Engineer and has extensive experience in project management anddevelopment in the power sector. As a Central Electricity Generating Boardengineer, he spent part of his early career on secondment to Eskom of SouthAfrica with responsibility for maintenance of a portfolio of 26 power plants. Hesubsequently became Head of Engineering Quality with National Power plc, wherehe developed and implemented policy for risk management of their UK assets aswell as leading the technical due diligence for significant internationalacquisitions such as Hub, a 1,200 MW oil-fired plant in Pakistan, and Marmara, a500 MW combined cycle power plant in Turkey. Recently, he led businessdevelopment at Lloyds' Register power division (subsequently Ingenco) andadvised developers on renewable energy projects. At IPC, he is responsible foroperations and maintenance activities and supervising technical due diligencefor proposed acquisitions and greenfield development in Latin America andCentral Asia. Elizabeth Shaw, Director of Finance, aged 44, has been involved in theelectricity sector since 1994. Between 1994 and 2000, as a director of Fieldstone, she advised on a number ofmergers, acquisitions and disposals in the electricity industry, both in the UKand in developing markets. In Bolivia, she advised on the spin-off of theElectropaz distribution business of Compania Boliviana de Energia Electrica S.A.to Iberdrola S.A. of Spain and on the sale by ENDE of its electricitydistribution interests in Cochabamba. Prior to joining Fieldstone, Elizabeth wasextensively involved in the financing of small-to-medium sized companies in theUK, including raising equity for both listed and unlisted companies. Currentlyshe is responsible for business development and finance at IPC. She is agraduate of Exeter University. Francis Mattos, Non-Executive Director, aged 72, has over 40 years' broad-basedpower sector engineering and management experience, initially as a seniormanager with the Central Electricity Generating Board. In 1984 he was secondedto British Electricity International (BEI), where he became director of overseasbusiness and project development. On privatisation of the U.K. electricitysector, BEI became National Power International with a focus on internationalutility acquisitions and power plant construction projects. Projects included the acquisition in 1993 of the Pego power station in Portugal,then the largest, privatised, power project in Europe. Recently he was anadviser to Sithe Energies, Inc. and is a consultant to the World Bank. He haswritten and presented papers on power system economics and control, tariffs,substation switching, planning and operations reliability standards. He is botha Chartered Engineer and a Chartered Manager. On 19 July 2004 the Company passeda resolution at an extraordinary general meeting to approve his appointment as aDirector notwithstanding that he has attained the age of 70, in accordance withsection 293(5) of the Act. Lock-ins and orderly market arrangements Following Admission, the Directors (and companies connected and/or associatedwith them) and certain senior management will be interested, in aggregate, in4,650,000 Ordinary Shares representing approximately 21.8 per cent. of theEnlarged Share Capital. Under the terms of the Lock-in Agreement each of theDirectors and their connected persons, save in certain limited circumstances,will not dispose of any interest in any Ordinary Shares held by them for aperiod of twelve months from Admission other than with prior written consent ofboth the Broker and Nominated Adviser and for a further twelve months, onlyhaving consulted the Broker and Nominated Adviser, or the Company's then brokerand nominated adviser, so as to ensure the maintenance of an orderly market inthe Ordinary Shares. Dividend policy The Company has not paid any dividends since its incorporation. The Directorsintend to commence the payment of dividends only when it becomes commerciallyprudent to do so, having regard to the availability of the Company'sdistributable profits and the retention of funds required to finance futuregrowth. In the medium term the Directors intend that dividend income will be asignificant source of shareholder value. Extraordinary General Meeting At an extraordinary general meeting of the Company which is to be held at 10.00a.m. on 29 July 2005. The EGM Resolutions will provide as follows: (a) to approve the Acquisition; (b) to increase the authorised share capital of the Company from £600,000 to£850,000 by the creation of a further 12,500,000 Ordinary Shares; (c) to authorise the Directors to allot (i) new Ordinary Shares pursuant to thePlacing; (ii) new Ordinary Shares pursuant to the Warrants; and (iii) otherwiseup to a maximum nominal amount of £128,100 (representing approximately 30 percent. of the Enlarged Share capital of the Company; (d) to authorise the Directors to allot equity securities for cash as if thestatutory pre-emption rights set out in section 89 of the Act did not apply toenable the directors to allot the new Ordinary Shares pursuant to the Placing;pursuant to rights or other offers and otherwise up to a maximum nominal amountof £21,350 (representing approximately 5 per cent. of the Enlarged Share Capitalof the Company). A circular comprising an admission document under the AIM rules, which includes,inter alia, a section on Risk Factors will be sent to Shareholders today. Thiswill include a Notice of an Extraordinary General Meeting of the Company to beheld on 29 July 2005, together with a form of Proxy. Enquiries: Peter Earl 020 7793 7676Rurelec PLC Paul ShackletonDaniel Stewart & Co PLC 020 7374 6789 Christian DennisHichens Harrison & Co. plc 020 7588 5171 DEFINITIONS The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Acquisition"the acquisition of Patagonia Energy pursuant to the Acquisition Agreement "Acquisition Agreement"the conditional agreement between Basic and Rurelec for the acquisition byRurelec from Basic of fifty per cent. of the issued share capital of PatagoniaEnergy "Act" or "Companies Act"the Companies Act 1985, as amended "Admission"the re-admission of the Existing Ordinary Shares and Investor Warrants totrading on AIM and the admission of the Placing Shares to trading on AIMbecoming effective in accordance with the AIM Rules "AIM"the market known as "AIM" operated by the London Stock Exchange "AIM Rules"the rules for AIM companies in force at the date of this document issued by theLondon Stock Exchange "Articles"the articles of association of the Company "Basic"Basic Energy Limited, a company organised and existing under the laws of theBahamas "Board"the board of directors of the Company, including a duly constituted committee ofsuch directors "BP plc"BP plc a company registered in England under registration number 00102498 whoseregistered office is at 1 St James's Square, London SW1Y 4PD "Broker" or "Hichens Harrison"Hichens, Harrison & Co. plc "Broker Warrants"75,000 warrants issued to Hichens Harrison on 18 August 2004 to subscribe for75,000 Ordinary Shares at a price of 40 pence per Share "CAMMESA" Compania Administradora del Mercado Mayorista Electrico S.A., theWholesale Power Market Administrative Company which is the corporation in chargeof the administration and coordinated operation of MEM and MEMSP according toestablished guidelines. Its members are the national government of Argentina andfour associations representing the generators, the transmission companies, thedistributors and the marketers. "Camuzzi"Camuzzi Argentina S.A. a company registered in Argentina whose principal officeis at Sede Central, Buenos Aires, Argentina "Capime"Capime Ingenieria S.A. a company registered in Argentina whose principal officeis at Talcahuano 736-7mo, Piso, Buenos Aires, Argentina "Combined Code"the "Combined Code on Corporate Governance" published in July 2003 by theFinancial Reporting Council "combined cycle"a combined cycle generator passes the hot exhaust gas from a gas turbine througha heat exchanger which produces steam to drive a secondary turbine "CREST"the computerised settlement system (as defined in the CREST Regulations)operated by CRESTCo which facilitates the transfer of title to shares inuncertificated form (as defined in the CREST Regulations) "CRESTCo"CRESTCo Limited "CREST Regulations"the Uncertificated Securities Regulations 2001 (SI 2001/3755) "Daniel Stewart"Daniel Stewart & Co plc, the Company's nominated adviser "Development Funding"funding provided for the purpose of financing a development programme either inthe form of a grant, or as a loan at a concessionary rate of interest and/orwith a longer term, than would normally be achieved on a commercial basis "Directors"the directors of the Company. "EGM"the extraordinary general meeting of the Company convened for 10.00 a.m. on 29July 2005 "EGM Resolutions"the resolutions set out in the Notice of the EGM "Enlarged Share Capital"the Ordinary Shares in issue immediately following Admission (excluding anyOrdinary Shares that may be issued pursuant to the exercise of any Warrantsprior to Admission) "ESA"Energia para Sistemas Aislados S.A., a company registered in Bolivia underregistration number 107752 whose principal office is at Av. Brasil, Esquina 3_Anillo, Santa Cruz, Bolivia "EDS"Energia del Sur S.A, a corporation duly incorporated and existing under the lawsof the Republic of Argentina, domiciled at Alicia Moreau de Justo 2050, 3rdfloor, office 307, City of Buenos Aires,Republic of Argentina "Electrica"Electrica del Sur, S.A., a corporation duly incorporated and existing under thelaws of the Republic of Argentina, domiciled at Alicia Moreau de Justo 2050, 3rdfloor, office 307, City of Buenos Aires, Republic of Argentina "ENDE"Empresa Nacional de Electricidad, the former integrated electricity utilityowned by the Bolivian state "Executive Directors"Peter Earl, Mike Eyre and Elizabeth Shaw "Existing Ordinary Shares"the 12,600,000 Ordinary Shares in the capital of the Company in issue "FSMA"the Financial Services and Markets Act 2000 "GDP"gross domestic product "Grant Thornton"Grant Thornton UK LLP of Grant Thornton House, Melton Street, Euston Square,London NW1 2EP "Group"the Company and its subsidiary undertaking "Guaracachi"Empresa Electrica Guaracachi, S.A., a company registered in Bolivia underregistration number 08-035910-03 whose principal office is at Av. Brasil,Esquina 3_ Anillo, Santa Cruz, Bolivia "interconnected system"a national electricity transmission network covering part or all of a country "Investor Warrants"1,000,000 warrants issued by the Company, on 18 August 2004 to subscribe for1,000,000 Ordinary Shares "IPC"Independent Power Corporation PLC a company registered in England underregistration number 3097552, whose principal office is at 5th Floor, PrinceConsort House, 27-29 Albert Embankment, London SE1 7TJ "IPOL"Independent Power Operations Limited, a company registered in England underregistration number 4288901, whose registered office is at 5th Floor, PrinceConsort House, 27-29 Albert Embankment, London SE1 7TJ"isolated electricity system"a local electricity network which is not connected to the Interconnected System "Jenbacher"GE Jenbacher 616 gas engines capable of generating 2 MW of continuous power "Lock-In Agreements"the conditional agreements governing the disposal of Ordinary Shares by theDirectors and others. "London Stock Exchange"London Stock Exchange plc "MEM"the MEM is the wholesale electricity market in the Argentine electricity marketand is administered by CAMMESA. The participants in the MEM are the generators,the distributors, the transmission companies, the large consumers (more than 50KW) and the marketers. The MEM consists of both a contract and a spotmarket. "MEMSP"the MEMSP is the Southern Patagonian wholesale electricity market which isadministered by CAMMESA. The participants in the MEMSP are the generators, thedistributors, the transmission companies, the large consumers (more than 50 KW)and the marketers active within the isolated southern system. The MEMSP consistsof both a contract and a spot market. "MW"mega watt, a measure of power (in this announcement electric power) "Non-Executive Directors"Jimmy West and Frank Mattos "Official List"the Official List of the UKLA "open cycle"a gas turbine in open cycle discharges the hot exhaust gas into the atmosphere(see combined cycle) "Ordinary Shares"ordinary shares of 2 pence each in the capital of the Company "Patagonia Energy"Patagonia Energy Limited a company registered in the British Virgin Islandsunder registration number 620522, whose registered office is at the offices ofWalker (BVI) Limited, Walkers Chambers, P.O. Box 92, Road Town, Tortola, BritishVirgin Islands "Patagonia Group"Patagonia Energy and its subsidiary undertakings "Patagonia Shareholders' Agreement"the conditional agreement between Basic, Rurelec and Patagonia Energy relatingto certain rights and obligations in respect of the shares in the capital ofPatagonia Energy. "Placees"the subscribers of Placing Shares pursuant to the Placing "Placing"the conditional placing by Hichens Harrison on behalf of the Company of thePlacing Shares pursuant to the Placing Agreement "Placing Agreement"the conditional placing agreement dated 6 July 2005 between theCompany, the Directors, Daniel Stewart and Hichens Harrison "Placing Price"40 pence per Placing Share "Placing Shares"the 8,750,000 new Ordinary Shares which are the subject of the Placing "Power Purchase Agreement"a long-term agreement to purchase power "Prospectus Rules"the Prospectus Rules of the UKLA "Rurelec" or the "Company"Rurelec PLC "Resolution"Resolution 406/2003 issued by the Argentine Secretariat of Energy in September2003 "Services Agreement"the shared services agreement dated 23 July 2004 between the Company and IPC "Shareholders"holders of Ordinary Shares "thermal generator"a generator whose source of energy is the combustion of hydrocarbons "UKLA"the Financial Services Authority, acting through the United Kingdom ListingAuthority, in its capacity as the competent authority for the purposes of PartVI of FSMA "USA" or "United States"the United States of America, its territories and possessions, any State of theUnited States of America and the District of Columbia "Warrants"the Broker Warrants and the Investor Warrants This information is provided by RNS The company news service from the London Stock Exchange