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Placing of 46,938,775 Ordinary Shares at 42 pence per share. USD 35 million Acquisition of a majority stake in Empresa ElÈctrica
Guaracachi, S.A. Re-Admission to trading on AIM
Rurelec today announces that its wholly owned subsidiary Birdsong Overseas Limited has agreed the acquisition of Bolivia Integrated from Southern Integrated for a total consideration of up to USD 35 million. Bolivia Integrated indirectly owns a majority stake of 50.00125 per cent. in Empresa ElÈctrica Guaracachi, S.A. ("Guaracachi" or "EGSA") Bolivia's largest power generation company.
Guaracachi was formed in 1995 as part of the privatisation of the Bolivian electricity industry. Following an international public tender, a 50 per cent. stake in Guaracachi was transferred to a subsidiary of GPU Inc, the US utility, in return for a cash investment of USD 47 million into Guaracachi. The Bolivian state's shares in Guaracachi were in turn transferred to two Bolivian pension funds with a small number of shares allocated to employees of the state power company, ENDE. In 1999, GPU was permitted to take Board control of Guaracachi and increase its stake to 50.00125 per cent. of the Company.
On 29 June, 2005 the share capital of Guaracachi was listed on the Bolivian stock exchange.
Guaracachi has three existing power plants with a total installed capacity of 360 MW. They are located in Santa Cruz (292 MW), Sucre (39 MW) and Potosi (27 MW). The latter plant's Olympus gas turbine is believed to be the highest operational gas turbine of any power plant in the world.
Guaracachi currently has two new power plant additions under construction for commissioning in 2006. These two plant additions in Sucre and Santa Cruz will add 79 MW of new nominal installed capacity, an increase of 22 per cent. compared with the current installed capacity.
Longer term, in 2007 and beyond, Guaracachi expects to add 80 MW of combined cycle capacity in Santa Cruz following the recent approval by the United Nations Clean Development Methodology Committee of the CCGT conversion methodology for calculating carbon emission reductions.
Guaracachi also expects to finalise a 120 MW Yacuiba export project for the sale and export of electricity to Argentina. Preliminary power purchase and fuel supply agreements for this project have already been reached respectively with CEMSA, the subsidiary of Endesa of Spain, and Chaco the Bolivian subsidiary of BP, and a preliminary finance agreement has also been agreed with a group of domestic financial institutions for a privately placed bond issue in support of the exportproject. The governments of Bolivia and Argentina announced this initiative in August 2005.
Both the CCGT conversion project and the Yacuiba export project are expected to be commissioned during 2007 and to make full year ontributions from 2008 onwards.
The consideration of USD 35 million comprises a cash payment of USD30 million on completion and a loan note of USD 5 million repayable upon the receipt of certain dividends or no later than 31 December 2010 The Company is proposing to raise approximately GBP18.5 million after expenses, through the issue of 46,938,775 Placing Shares, to institutional and other investors, at a price of 42 pence per Placing Share to finance the Acquisition. The Placing Shares will represent approximately 68.7 per cent. of the Enlarged Share Capital. At the Placing Price, the Company's market capitalization on Admission will be £28,681,285.
Owing to its size and the interests of certain Directors, the transaction constitutes both a "reverse takeover" and a Related Party Transaction for the purpose of the AIM Rules and is conditional on shareholder approval. A circular comprising an Admission Document under the AIM rules will be sent to Shareholders today. This will include a Notice of an Extraordinary General Meeting of the Company to be held on 5 January 2006, together with a form of Proxy.
Enquiries:
Peter Earl
Rurelec PLC 020 7793 7676
Paul Shackleton
Daniel Stewart & Co. plc 020 7776 6550
Christian Dennis
Hichens Harrison & Co. plc 020 7588 5171
Daniel Stewart & Co. plc, which is regulated by the Financial Services Authority, is acting as nominated adviser to the Company. It will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of any part this announcement. The responsibilities of Daniel Stewart & Co. plc as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or any Director or Shareholder or to any other person, in respect of any decision to acquire Ordinary Shares in reliance on any part of this announcement or otherwise. Daniel Stewart & Co. plc is not making any representation or warranty, express or implied, as to the contents of this announcement.
Hichens, Harrison & Co. plc, which is regulated by the Financial Services Authority, is acting as broker to the Company. It will not be responsible to any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of any part of this announcement. The responsibilities of Hichens, Harrison & Co. plc as the Company's broker under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or any Director or Shareholder or to any other person, in respect of any decision to acquire Ordinary Shares in reliance on any part of this announcement or otherwise. Hichens, Harrison & Co. plc is not making any representation or warranty, express or implied, as to the contents of this announcement.