Short Term Loan Facility and Trading Update

RNS Number : 1272V

Rurelec PLC

13 April 2016

 

13 April 2016

Rurelec PLC

("Rurelec" or the "Company")

Increase in Short Term Loan Facility and Trading Update

The Directors of Rurelec PLC (AIM: RUR), the owner, operator and developer of power generation capacity internationally, are pleased to announce that the Company has increased the existing short term loan facility of £850,000 (the "Initial Facility") with Bridge Properties (Arena Central) Limited ("BPAC") by an amount of £350,000 (the "Increased Facility"). The Increased Facility is now £1,200,000. As announced on 18 February 2016 £850,000 was drawn down on that date, today the Company has drawn down an additional £150,000. The terms and conditions are as per the Initial Facility. The proceeds are to be utilised for working capital for the Company and its operations in Chile and Peru.

The Loan is intended to allow the Board time to source further long term funding. There can be no guarantee that long term funding will be available to the Company. Notwithstanding the Increased Facility, the Company's cash position continues to be extremely tight.

The Directors are exploring how best to arrange for the Company to benefit from the cash generated by the asset in Argentina in which it has a 50 per cent. interest. The Company announces that receipts in the first part of the year from its Argentine joint venture, Energia del Sur S.A. ("EdS"), have been significantly below forecast in 2016. This is largely due to structural changes in the Argentine electricity market, whereby the subsidies from the state are being reduced whilst at the same time prices to the end users are being increased. This has led to cash shortages within the sector as this transition takes place. Whilst the Company expects these changes and Argentina's widely reported exchange controls relaxation will be beneficial to the Company, the short term effect has been that EdS has moved from collecting debt from 45 days of revenue to 90 days of revenue. The plant to date is performing to budget at EBITDA level for 2016 and it is meeting its third party obligations from its own resources. The Company expects cash receipts for the full year to be at a similar level as 2015.

For further information please contact:

Rurelec PLC	W H Ireland
Simon Morris, Director	Paul Shackleton and James Bavister
Tel: [phone]	Tel: [phone]

 

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