Albanesi seeks US$270mn funding for 2 power plants
Argentine energy company Albanesi is analyzing financing options for cycle closures at its 350MW Modesto Maranzana and 150MW Ezeiza thermal power plants to bring them to 463MW and 268MW, respectively.
The company needs US$270mn for both upgrades and about US$150mn to comply with just one of the contracts signed with state electricity wholesaler Cammesa, and which it had won in the government’s 2017 energy efficiency tender.
It has already paid US$80mn, while US$90mn will come from its cash flow, but the rest requires funding.
Albanesi aims to develop one unit, unless it can get funding for both. The company is already analyzing alternatives in the local market since Argentina’s economic-financial situation prevents foreign funding, a source close to the company told BNamericas, requesting anonymity.
The source said that the sooner the financing comes the better, highlighting that banks are not an option because they lend only for specific short-term purposes.
Both cycle closures must be completed by December 6, 2022 as per the agreement with Cammesa from October 2019, which postponed the start of commercial operations.
In exchange, Albanesi had to shorten the contract by five years, now charging US$33.50/MWh for 10 years once generation starts.
The company had already tried to secure funding throughout 2019, when it issued an US$80mn private bond that matures in 2023. Back then, bank loans or placing local or international RegS and Reg D bonds were under consideration, but in the wake of the political turmoil due to the presidential primaries and then the elections investors charged interest rates that made development unviable.
Albanesi already has some equipment, obtained after it partially paid a debt with supplier Siemens with funds from the 2019 bond. But Siemens is still owed US$40mn and is holding back equipment until it is paid.
The source said that the company will pay the debt as soon as it obtains the financing.
Albanesi is currently financing a portion of the US$105mn for the turbines and the steam recovery boiler with a US$61.2mn loan obtained in 2018 and maturing in 2023 from BLC Asset Solutions.
As BNamericas reported previously, the company has just refinanced the maturities of the loan due this year. It will pay 25%, or US$15.3mn, another 25% in 2022, and the rest in 2023.
The Modesto Maranzana and Ezeiza units will remain semi-paralyzed until the company gets the financing.
After completing the works, the units will operate with highly efficient turbines, so that both plants will always dispatch energy and generate more income.
This will help reduce leverage, which stood at 3.70x as of September 30, although leverage will also initially increase if financing is obtained. Albanesi expects 2021 Ebitda of US$160mn.
A debt problem
In parallel, the company is beginning talks with creditors on refinancing US$357mn of a 9.63% bond due in July 2023.
The company aims to extend the payment by three or four years, the source said. In return, it plans to offer an amortization system, which current notes lack.
Albanesi seeks to advance the process to avoid pressure building just before the due date. It hopes to finish the process late this year or early 2022.
"What we are going to end up offering is something very similar to what Genneia can close in the restructuring of its bond that expires in January 2022. It will be our benchmark," the source said.
YPF is also restructuring its US$6.6bn debt. The transaction has caused turmoil in the local market as YPF has tried to impose a unilateral proposal without consulting its creditors.
“The big difference with YPF's operation is that the restructuring of Albanesi is a necessity and it will have to be done. You have to look for the best moment and investors know this,” according to the source.
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