Rurelec to receive compensation for Bolivian nationalization, agrees loan extension

Friday, December 20, 2013

Rurelec PLC (AIM: RUR), a London-based operator and developer of power generation capacity, will receive notification of its compensation award for the nationalization of its Bolivian assets in January, the company has announced.

The firm is engaged in an arbitration process against Bolivia for compensation for its 50% stake in Bolivian generator Empresa Eléctrica Guaracachi, which was nationalized by the Bolivian government in May 2010.

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The company has also announced an extension to the US$15.5mn loan from Birdsong Overseas Limited, announced in July 2012, to take effect from 1 January 2014. Amendments to the original terms include an additional 4% of interest payable at a new repayment date of April 30, 2014.

"Shareholders should take note that the judgment for the arbitration claim will finally be made public in January 2014," CEO Peter Earl said.

"This is beyond the year-end date that the board had been expecting. We have therefore extended our current loan and we are pleased that this loan extension has been agreed and executed ahead of the year end.

"The three-and-a-half-year arbitration process has unfortunately taken longer and cost more than initially anticipated, but we are pleased that a resolution is imminent. We have used the funds obtained under the Birdsong loan to move back into growth mode following the expropriation of our principal asset. We have achieved success in replacing our lost generation capacity and we look forward to 2014 with renewed optimism," Earl said.

The firm's core business is the ownership and development of power generation facilities on national and regional grids and in isolated areas, primarily in Latin America.

Rurelec is also awaiting the announcement of the date when its shares will commence trading on the Santiago Stock Exchange under an agreed dual listing.