Rurelec Regulatory News (RUR)

25 Jan 2005 09:32

Rurelec PLC25 January 2005 FOR IMMEDIATE RELEASE Rurelec PLC ("Rurelec") Acquisition of power generation equipment out of receivership On-sale to Independent Power Corporation PLC ("IPC") 25th January 2005 Rurelec announces that yesterday it acquired for a purchase consideration of £1million in cash nine Jenbacher 616 gas engines with a total nominal capacity of18 MW (together with associated ABB generators and heat recovery systems) fromTrevor O'Sullivan and Simon Bower acting as Receivers to Medina Finance Limited,a company in administrative receivership (the "Vendors"). £800,000 of the purchase consideration was paid to the Vendors yesterday fromRurelec's own resources. Payment of the balance, which has been guaranteed byIPC as part of the onward sale transaction described below, is due to be paid tothe Vendors on 15th February 2005. The Jenbacher is a high efficiency gas engine of 2 MW installed capacity whichruns on natural gas. Rurelec intends to use three of the engines for a newrural electrification project in Tarija in southern Bolivia, where there arelarge reserves of natural gas, local demand for affordable power and where thepossibility also exists of electricity supply to isolated power systems inNorthern Argentina, which are currently experiencing acute shortages ofelectricity as demand growth increases. Yesterday, Rurelec also entered into a contract to sell on to IPC the remainingsix Jenbacher machines for £1 million, excluding VAT. in cash. Thistransaction is due to complete on 15th February 2005. No residual liability willremain with Rurelec following their sale. The sale of the six machines to IPCwill give rise to a gross profit to Rurelec on the sale of approximately£333,000 and the carrying value of engines retained will also be approximately£333,000. Rurelec's Managing Director Peter Earl, due to his holding of a controllingstake in IPC, is a related party as defined by the AIM Rules for the purposes ofthe sale by Rurelec of the six machines to IPC. The directors of Rurelec, withthe exception of Peter Earl (the "Rurelec Directors"), consider, havingconsulted with Rurelec's nominated adviser Arbuthnot Securities Limited, thatthe sale of the six machines to IPC is fair and reasonable insofar as Rurelec'sshareholders are concerned. In consulting with the Rurelec Directors, Arbuthnothas relied upon the Rurelec Directors' commercial assessments. Rurelec also announces the appointment of Carlos Garcia Agreda as GeneralManager of its Bolivian isolated power subsidiary, Energia para SistemasAislados SA ("ESA"). Carlos Garcia is an electrical and mechanical engineer whospent six years at Co-operativa Rural de Electrificacion ("CRE"), a distributionco-operative that serves Bolivia's Santa Cruz department and which is alsoBolivia's largest rural electrification co-operative, before takingresponsibility for rural electrification projects at Bolivia's Vice-Ministry ofElectricity. ESA is currently working on the installation of 6 MW ofWorthington reciprocating engines in Trinidad in Central Bolivia and on thedevelopment of a 10 MW isolated power project serving Yacuiba in southernBolivia at a time when the provision of power for isolated generation has becomean important political issue in Bolivia. ESA is in discussions, which may leadto new joint ventures with local partners in Bolivia and Argentina and withmulti-lateral agencies for an accelerated roll-out of new power capacity in theSouthern Cone of Latin America. Elizabeth Shaw Finance Director For further information contact: Elizabeth ShawTel: +44 (0)20 7793 7676 Rurelec PLC is a British company established to develop rural electrificationprojects in Latin America. It is managed by a team with a strong track recordin developing power projects worldwide and with considerable experience in theelectricity sector in Latin America. Rurelec has two principal businesses: -Ownership of power generation facilities in isolated areas -Management of rural electrification expansion projects funded by the World Bank or multi-lateral development agencies. Rurelec recently floated on the AIM market of the London Stock Exchange in orderto have access to European institutional capital for new power projects and toensure transparency for its public sector-funded project management activities. Arbuthnot Securities Limited which is authorised by the Financial ServicesAuthority is acting as nominated adviser to Rurelec and for no one else inconnection with the transactions described herein and will not be responsible toany person other than Rurelec for providing the protection afforded to itscustomers or for advising any other person in relation to the transactionsdescribed herein. This information is provided by RNS The company news service from the London Stock Exchange