Language
RURELEC PLC
("Rurelec" or "the Company")
Issue of 200,000,000 Ordinary Shares at 9 pence per share by way of Placing, Subscription and Capitalisation
Authority to issue up to 15,500,000 Ordinary Shares at 9 pence per share pursuant to the Sterling Option
Approval of waiver of obligations under Rule 9 of the Takeover Code
Notice of General Meeting (the "Proposals")
Rurelec, the AIM quoted independent power plant developer with operations in South America, is pleased to announce that it has today sent a Circular (the "Circular") to Shareholders seeking their approval for the issue of 200,000,000 Ordinary Shares at 9 pence per share by way of Placing, Subscription and Capitalisation, raising approximately £16.3 million before expenses and capitalising £1.7 million of Company indebtedness. The proceeds of the issue will be used for the acquisition of senior secured debt due from Energia del Sur S.A., (50% owned by Rurelec), the repayment of Unsecured Indebtedness and Loan Notes, for working capital and for settlement of outstanding trade creditors.
The issue has been supported by certain major shareholders, including Sterling Trust Limited. Sterling Trust Limited's participation in the issue and its ability to exercise an option over up to 15,500,000 Ordinary Shares is subject to the approval of the Company's other shareholders, as its interest in Rurelec will rise to over 50 per cent. of the enlarged share capital of Rurelec. Accordingly, the Panel on Takeovers has been consulted and has approved the waiver of obligations under Rule 9 of the Takeover code as set out below in paragraph 8.
The Rule 9 waiver and the increase in share capital are both subject to shareholder approval which will be sought at the General Meeting to be held at the offices of the Company at 5th Floor, Prince Consort House, 27-29 Albert Embankment, London SE1 7TJ on 28 March 2011 at 10.00 a.m.
Commenting on the placing, Peter Earl, CEO of Rurelec said: "We are delighted that Sterling Trust and other significant shareholders are showing their continued support of Rurelec. The fundraising will place the Company on a more conservative financial footing by eliminating debt. It will strengthen our balance sheet, whilst providing us with greater certainty over the future of the Company whilst we seek to negotiate a settlement with the Government of Bolivia. The acquisition of the senior debt of Energia del Sur will allow us the freedom to restructure the debt of Energia del Sur and accelerate payment of interest and principal on all funds Rurelec has lent to finance the successful implementation of the combined cycle conversion project."
For further information contact:
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Peter Earl, Chief Executive Officer Elizabeth Shaw, Finance Director |
+44 (0)20 7793 5610 |
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Nominated Adviser: Daniel Stewart & Company PLC Paul Shackleton/Noélle Greenaway |
+44 (0)20 7776 6550 |
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Brokers: Daniel Briggs, Religare Capital Markets PLC |
+44 (0)20 7444 0500 |
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Financial PR: Ana Ribeiro/Tim Blythe, Blythe Weigh Communications Ltd. |
+44 (0)20 7138 3206 |
The following information is extracted from the Circular, copies of which are available at the Company's registered office (5th Floor, Prince Consort House, 27-29 Albert Embankment, London SE1 7TJ) and on the Company's website, www.rurelec.com/investors
1. Introduction
Rurelec proposes a refinancing which the Board believes will allow Rurelec to protect its investment in Energia del Sur, S.A. The Company intends to acquire the EdS Senior Debt, and redeem (in part) and Capitalise (in part) the Loan Notes and the Unsecured Indebtedness through the "Proposals"
The purpose of this announcement is to set out the background and reasons for the Proposals and explain why Shareholders should vote in favour of the Resolutions which will be considered by members at a General Meeting of the Company to be held on 28 March 2011.
2. Background to the Proposals
Rurelec has a 50 per cent. interest in EdS which owns and operates a 136 MW Combined Cycle Gas Turbine power station in Patagonia, Argentina. In 2009 the combined cycle conversion was successfully completed, but has involved Rurelec in providing approximately $30 million of EdS Shareholder Loans. This is in addition to the Senior Debt secured on EdS's assets.
The Company had to direct substantial resources to EdS to prevent a possible insolvency and the forced sale of Rurelec's EdS investment at the time international debt markets tightened as a result of the global financial crisis. The majority of the Company's Loan Facilities are due to be repaid on 31 March 2011 and it is for this reason that the Directors have been looking for a way to refinance EdS. Various re-financing solutions were sought and pursued, either through bank debt or Argentine bond issues, but were either unavailable to the Company or were too expensive and therefore unacceptable to Rurelec's partner, Basic Energy Limited.
Since September 2010 EdS has been operating under the new Resolution 220 contracts which allow EdS to achieve premium tariffs for power generated by the new steam turbine. The Board believes that this places EdS on a stronger footing.
Acquisition of the Senior Debt
Latterly, an opportunity has arisen for the Company to acquire the EdS Senior Debt. If the acquisition is approved and implemented, Rurelec intends to restructure the Senior Debt payments from EdS so that the Company and its partner Basic Energy Limited receive timely payments of all of the interest and accelerated repayment of the principal sum due on the EdS Shareholder Loans.
Sterling Trust's wholly-owned subsidiary, Sterling Trust Securities Limited, a special purpose vehicle, agreed to acquire the EdS Senior Debt at par under two trade agreements dated 25 February 2011 and 11 March 2011 and a novation agreement dated 11 March 2011, amounting in aggregate to approximately £7.9 million. Each agreement has a completion date of 31 March 2011. Rurelec entered into the Option Agreement with Sterling Trust to acquire STSL for the payment in cash of £1. If the Proposals are agreed by Shareholders, it is intended that Rurelec will exercise the Option to acquire STSL and will use new funds raised pursuant to the Issue to enable STSL to complete the Senior Debt purchase.
With EdS able to service the Senior Debt direct to Rurelec, the Board expects to have an improved underlying cashflow and the ability to return to its stated activities of seeking to develop and acquire power generation assets or businesses in the Southern Cone. In order to diversify risk, the Directors intend to expand the Group's activities into other countries in the Southern Cone. The Directors intend to use local borrowing in Argentina to refinance EdS if markets there return to a reasonable cost of funding.
Repayment of the Company's Unsecured Loans and the Company's Loan Notes
On 31 March 2011 a number of the Company's unsecured debt obligations under the Loan Facilities will fall due, amounting in aggregate to approximately £7.9 million. In particular, the Company will be obliged to redeem the outstanding Loan Notes on 31 March 2011 which are not capitalised.
3. The Issue, the Sterling Option and use of proceeds
If approved, the proposed Subscription and Placing will raise approximately £16.3 million, before expenses. The Subscription, Placing and Capitalisation are each conditional on all the Resolutions being passed at the General Meeting.
In aggregate, the Company will issue 200,000,000 New Ordinary Shares representing approximately 47.5 per cent. of the Enlarged Share Capital. At the Placing Price, the Company's market capitalisation on Admission will be £37.90 million.
The Company will issue 180,793,677 Placing Shares for cash at 9 pence per Placing Share to fund the repayment of the Loan Facilities which are not being capitalised, and to fund STSL's acquisition of the EdS Senior Debt.
The Company will additionally Capitalise £670,000 of Loan Note Indebtedness and approximately £1.06 million of the Unsecured Indebtedness into 19,206,323 Capitalisation Shares at 9 pence per share.
Sterling Trust has conditionally undertaken to acquire 143,989,622 Placing Shares pursuant to the Subscription and 6,111,111 shares under the Capitalisation. Following Admission, Sterling Trust will own in aggregate 210,361,181 Ordinary Shares being 50.01 per cent. of the Enlarged Share Capital. In addition, the Company has granted Sterling Trust the Sterling Option, an option over 15,500,000 Ordinary Shares at 9 pence per share which is exercisable in whole or in part on more than one occasion up to 5.00pm on 1 April 2011. Sterling Trust's ability to exercise the Sterling Option is conditional on all the Resolutions being passed at the General Meeting.
The net proceeds of the Subscription and Placing will be applied to settlement of the trade agreements entered into by STSL, and the repayment of the balance of each of the Unsecured Indebtedness and the Loan Notes (including accrued interest) in each case which is not Capitalised. The remainder, and any funds raised pursuant to the exercise of the Sterling Option will be used by the Company for working capital and the settlement of outstanding trade creditors.
EdS is equity accounted and not fully consolidated. The consolidated borrowings of the Group after the Placing will be approximately $3 million. The current EdS loan balances are estimated to be the following:
Gross CAMMESA loans of $4.7 million, being advance funds to support capital expenditure; and
Gross Argentinian tax authority loans of $1.3 million.
4. Admission to trading of the New Ordinary Shares
Application will be made for admission to trading on AIM of the New Ordinary Shares. Subject to the Resolutions being approved by Shareholders, it is expected that dealings will become effective and commence at 8.00 a.m. on 29 March 2011. It is anticipated that CREST accounts will be credited on the day of Admission and that certificates will be despatched by first class post by 8 April 2011.
The New Ordinary Shares will rank pari passu in all respects with the Issued Share Capital.
5. Related Party Transactions
Sterling Trust holds more than 10 per cent. of the Issued Share Capital of the Company and is therefore deemed to be a Substantial Shareholder of the Company for the purposes of the AIM Rules. As a result, the exercise of the Option by Rurelec to acquire STSL will constitute a related party transaction for the purposes of Rule 13 of the AIM rules.
The Directors, having consulted with Daniel Stewart & Company, the Company's nominated adviser, consider that the terms of the acquisition of STSL are fair and reasonable in so far as Shareholders are concerned.
6. Information on Sterling Trust
Sterling Trust is an investment company which was taken private some years ago by the present management following the sale of its banking company, Sterling Bank and Trust Company Ltd to Beneficial Bank. The formerly quoted company was the principal UK holding company for Robert Holmes à Court, with interests in insurance, banking, investment and finance, then named Dewey Warren Holdings Plc. The board of directors of Sterling Trust comprises Colin Emson, Chairman, John Bottomley FCIS, J.K. Farrell and Nigel Pilbrow. Sterling Trust's address is One America Square, Crosswall, London EC3N 2SG.
Sterling Trust has access to substantial resources and is continuing a programme of investment acquisitions, typically taking an active and supporting role in the companies with which it is involved. This has previously been in the fields of insurance, debt trading, securities holdings, private investment company acquisitions, hotels and power development companies.
In 2010, Sterling Trust acquired a shareholding of 27.3 per cent. of the Issued Share Capital of Rurelec through on and off market purchases. Sterling Trust also owns £550,000 of Loan Notes. Sterling Trust acquired 100 per cent. of IPC in June 2010. Prior to its acquisition by Sterling Trust, IPC, together with its wholly owned subsidiary Southern Integrated Energy Limited, made three unsecured loans to Rurelec which currently amount in aggregate to approximately £1.2 million, including interest. The loans are due for repayment on 30 June 2011. The principal amount of the £550,000 of Loan Notes will be capitalised into 6,111,111 Capitalisation Shares, whereas the £1.2 million of Unsecured Loan and accrued interest on the £550,000 of Loan Notes will be repaid from the current Placing monies.
Peter Earl and Elizabeth Shaw are directors of IPC and Michael Eyre is a director of one of its subsidiaries but they are not considered to be acting in concert with Sterling Trust for the purposes of the Takeover Code. Peter Earl was appointed to the board of IPC on 1 September 1995 and Elizabeth Shaw on 16 April 2002. Following its acquisition of IPC, Sterling Trust has appointed directors to the board of IPC. None of the Rurelec Board are directors of Sterling Trust. Save for the Option to acquire STSL and the Sterling Option, there are no other arrangements between Sterling Trust and the Directors of Rurelec.
7. Relationship Agreement with Sterling Trust
On 11 March 2011, the Company entered into the Relationship Agreement with Sterling Trust and Daniel Stewart which is to take effect on Admission. The Relationship Agreement will maintain Rurelec's Independence from Sterling Trust. Pursuant to the Relationship Agreement Sterling Trust undertakes, amongst other things, to exercise its powers in relation to the Company to ensure that:
(a) each member of the Group is capable of carrying on its business independently of Sterling Trust and any of its associates, rather than for the benefit of any particular shareholder or group of shareholders in the Company:
(b) that the business and affairs of the Company shall be managed by the Board in accordance with the articles of association of the Company and all applicable law and for the benefit of the shareholders of the Company as a whole;
(c) all transactions between Sterling Trust and the Group will be conducted on arm's length terms and on a normal commercial basis so the independence of the Board is maintained;
(d) it will procure that each of its associates will not exercise any voting rights in favour of any amendment to the articles of association of the Company which would be inconsistent with, or in violation of, the terms of the Relationship Agreement;
(e) it will not propose a resolution to (or otherwise seek to) appoint or remove any director or officer from time to time of the Company, other than in accordance with a resolution or recommendation of the Board;
(f) save with the consent of both the Company's nominated adviser and a majority of independent directors, abstain from exercising any voting rights attaching to the Ordinary Shares in which it (or its associates) is interested in respect of any contract, transaction or arrangement or any other proposal whatsoever in which Sterling Trust (or any of its associates) is interested or in respect of which there is a conflict between the interests of Sterling Trust and members of the Group;
(g) it will not, and will procure that its associates will not, propose or vote in favour of any resolution to waive pre-emption rights on the issue of shares set out in the articles of association of the Company unless such resolution is supported by a majority of independent directors provided that Sterling Trust may vote in favour of the annual disapplication of pre-emption rights in respect of shares comprising 5 per cent. of the issued share capital from time to time of the Company or such higher annual limit as may be sanctioned from time to time by the ABI guidelines or any successor guidelines generally recognised as such in the United Kingdom.
For the purposes of the Relationship Agreement the current Directors of Rurelec are all independent directors.
The undertakings given by Sterling Trust will cease to bind it at any time when Sterling Trust and its associates collectively cease to hold Ordinary Shares carrying less than 30 per cent. of the voting rights in respect of the Company.
8. Waiver of obligations under Rule 9 of the Takeover Code
The Takeover Code is issued and administered by the Panel. The Takeover Code applies, inter alia, to all offers for public companies which have their registered office in the UK, Channel Islands and the Isle of Man and which are considered to have their place of central management and control in these jurisdictions. The Company is subject to the Takeover Code. Accordingly, Shareholders are entitled to the protections afforded by the Takeover Code.
Under Rule 9 of the Takeover Code, any person who acquires an interest (as defined in the Takeover Code), whether by a series of transactions over a period of time or not, in shares which, taken together with shares in which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders in that Company to acquire their shares.
Similarly, where any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company, but does not hold shares carrying more than 50 per cent. of the voting rights of the company, a general offer will normally be required if any further interest in shares is acquired by any such person. However, when a person holds in excess of 50 per cent. in the Company, no general offer will be required if such person increases his interest in shares.
An offer under Rule 9 must be in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares acquired during the 12 months prior to the announcement of the offer.
Under the Takeover Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal) co-operate to obtain or consolidate control of that company. Control means an interest or interests in shares carrying an aggregate of 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.
Sterling Trust currently holds 27.3 per cent. of the Issued Share Capital and approximately £550,000 of Loan Notes. Sterling Trust will subscribe for 143,989,622 Placing Shares and will capitalise the principal amount of its Loan Notes into 6,111,111 Capitalisation Shares, in each case at the price of 9 pence per New Ordinary Share. Following the Subscription and the Capitalisation Sterling Trust will hold 210,361,181 Ordinary Shares representing approximately 50.01 per cent. of the Enlarged Share Capital.
As at the date of this announcement, the existing shareholding of Sterling Trust is as follows:
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Existing Ordinary Shares held as at the date of this announcement |
% of Issued Share Capital as at The date of this announcement |
£1 nominal Loan Notes |
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60,260,448 |
27.3% |
550,000 |
Following the Subscription, Placing and Capitalisation Sterling Trust's shareholding will be as follows:
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Number of Ordinary Shares held following completion of the Subscription, Placing and Capitalisation |
% of Enlarged Share Capital following completion of the Subscription, Placing and Capitalisation |
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210,361,181 |
50.01% |
In addition, the Company has granted Sterling Trust the Sterling Option over 15,500,000 Ordinary Shares.
Loan Notes and accrued unpaid interest amounting in aggregate to approximately £2 million may be converted into Ordinary Shares at any time on or before 31 March 2011. The conversion price is 13.75 pence per share.
In the event that these Loan Notes are converted, it would result in the issue of up to 14,906,182 Ordinary Shares. In such circumstances, if the Sterling Option was not exercised Sterling Trust's holding would be diluted to 48.29 per cent. and any increase in its holding thereafter would require it to make a general offer as described above. In the event that the Sterling Option is exercised Sterling Trust will hold more than 50 per cent. of the voting rights of the Company as follows:
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Resultant holding by Sterling Trust as % of the Company as enlarged by either or both of the exercise of the Sterling Option and conversion of the Loan Notes |
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Placing, Subscription, Capitalisation and Loan Notes converted |
Sterling Option not exercised |
48.29% |
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Placing, Subscription, Capitalisation and Loan Notes converted |
Sterling Option exercised |
50.07% |
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Placing, Subscription, Capitalisation and Loan Notes not converted |
Sterling Option exercised |
51.78% |
The Panel has been consulted and has agreed, subject to the passing of Resolution 1 at the General Meeting on a poll by Independent Shareholders, to waive the obligation of Sterling Trust to make a general offer to Shareholders under Rule 9 of the Takeover Code that would otherwise arise as a result of the Subscription, Placing and Capitalisation.
Shareholders should be aware that, on Admission of the New Ordinary Shares, Sterling Trust will, in aggregate, hold more than 50 per cent. of the Company's Enlarged Share Capital. Accordingly, Sterling Trust may increase their interest in shares without incurring any obligation under Rule 9 to make a general offer.
Sterling Trust has confirmed to the Company that it is not proposing to seek any change in the composition of the Board, or any other aspect of the Company's business.
Sterling Trust has also confirmed that it has no intention to change the locations of the Group's respective places of business, or the continued employment of their employees and management, including any material change in conditions of employment, nor will there be any redeployment of the fixed assets of the Group, as a result of the Proposals.
9. Current Trading
The unaudited interim results of Rurelec were issued on 29 September 2010. The profit for the period reported was £17.4 million. This figure included a one off gain of £15 million and a notional compensation level of £47 million ($73 million) corresponding to the audited book value of Rurelec's nationalised interest in Empresa Electrica Guaracachi S.A. ("Guaracachi"). In addition, Rurelec reported an estimated trading profit from discontinued operations at Guaracachi of £1.4 million.
As previously announced, on 1 May 2010 the Bolivian Government nationalised Rurelec's controlling stake in Guaracachi. Rurelec continues to own a 50 per cent. interest in the 136 MW gas fired combined cycle plant of EdS. EdS made a trading profit of just over £1 million for the six months ending 30 June 2010, of which the Company's share is £0.5 million. That profit was recorded before the long-awaited Resolution 220 contract was awarded to EdS in August 2010. The Resolution 220 contract has the effect of increasing power generation margins at EdS and the reported profit for the first half did not include these increased margins since the contract did not take effect until mid-September.
The delay in the receipt of dividends from Guaracachi strained the Company's cash position in the year running up to nationalisation and we have subsequently had to incur unbudgeted legal costs to protect Rurelec's and Guaracachi America Inc's claims.
In Bolivia, Rurelec has started the arbitration process for compensation for the nationalisation of its Bolivian subsidiary. Whilst the Company remains hopeful of and open to a negotiated settlement, no formal offer has been made by the Government of Bolivia. If the Company is forced to follow a full arbitration process, shareholders may have to wait up to 18 months for the issue to be resolved. As in any dispute, the outcome cannot be certain.
Since the expropriation of the Bolivian asset Mike Eyre's role has diminished and accordingly he intends to resign after implementation of the Proposals. The Board intends to appoint a senior non-executive director with a suitable technical background in due course.
10. Historical Financial Information on the Company
The historical financial information of the Company for each of the three financial periods up to
31 December 2008, 31 December 2009 and for the 6 months to 30 June 2010 has been incorporated by reference to the Company's published report and accounts for each of those three periods and to the Company's latest interim report, as set out in the Circular.
11. General Meeting
A General Meeting of the Company will be held at the offices of the Company at Prince Consort House, 27-29 Albert Embankment, London SE1 7TJ at 10.00 a.m. on 28 March 2011 for the purpose of considering, and if thought fit, passing the following resolutions:
1. To approve the Rule 9 Waiver;
2. To grant the Directors the authority to issue and allot the New Ordinary Shares and Ordinary Shares pursuant to the Sterling Option and, in addition, the authority to issue and allot (a) equity securities representing one third of the Enlarged Share Capital; and (b) equity securities in relation to a rights issue representing two-thirds of the Enlarged Share Capital under Section 551 of the Act; and
3. To grant the Directors pursuant to Section 570 of the Act the authority to allot equity securities (as defined in Section 560(1) of the Act) for cash as if Section 561(1) of the Act did not apply in relation to (a) the New Ordinary Shares and Ordinary Shares pursuant to the Sterling Option; (b) a rights issue; and (c) equity securities representing approximately 5 per cent. of the Enlarged Share Capital.
To be passed, Resolution 1 requires a majority of over 50 per cent. of the Independent Shareholders voting on a poll in person or by proxy to vote in favour of the Resolution.
Subject to the passing of Resolution 1, Resolution 2 is proposed as an ordinary resolution and therefore requires over 50 per cent. of the Shareholders voting in person or by proxy in favour of the Resolution. All Shareholders are entitled to vote.
Subject to the passing of Resolutions 1 and 2, Resolution 3 is proposed as a special resolution and therefore requires 75 per cent. or more of Shareholders voting in person or by proxy to vote in favour of the Resolution. All Shareholders are entitled to vote.
12. Irrevocable Voting Commitments
The Company has received irrevocable voting commitments to vote in favour, or to procure a vote in favour of all the Resolutions from Shareholders (excluding Sterling Trust) holding in aggregate 69,387,430 Ordinary Shares, representing 31.4 per cent. of the Company's Issued Share Capital.
The Company has received an irrevocable voting commitment from Sterling Trust in respect of Resolutions 2 and 3 where it is entitled to vote in respect of 60,260,448 Ordinary Shares, representing 27.3 per cent. of the Company's Issued Share Capital.
Additionally, the Directors have irrevocably undertaken to the Company to vote in favour, or to procure a vote in favour, of all Resolutions to be proposed at the General Meeting, in respect of their aggregate holdings totaling 875,000 Ordinary Shares, representing approximately 0.4 per cent. of the Issued Share Capital.
13. Reasons for the Proposals
The Directors believe that the Proposals will result in a stronger balance sheet for the Company enabling it to resume its stated strategy. The acquisition of the Senior Debt will remove the risk of the holder forcing the sale of EdS's assets to the detriment of Shareholders. The Directors consider that the financial security resulting from, and Shareholder support for the Proposals, may improve Rurelec's ability to negotiate a favourable settlement in Bolivia.
If the Proposals are rejected by Shareholders, the Company will not be able to acquire the Senior Debt and will default on repayment of the Loan Facilities. Shareholders should be aware that, in the event that the Resolutions are not passed the Proposals will not proceed. The Company would, in such circumstances, face an uncertain future and the Directors would need to consider alternative options (if available) to finance the Company to ensure its continued existence. Any such alternative may lead to a significant impairment of Shareholder value.
14. Recommendation by the Directors
The Directors, who have been so advised by Daniel Stewart, consider that the terms of the Proposals are fair and reasonable and are in the best interests of the Company and the Independent Shareholders as a whole. In providing advice to the Directors, Daniel Stewart has taken into account the Directors' commercial assessments. Accordingly the Directors unanimously recommend Independent Shareholders to vote in favour of Resolutions 1, 2 and 3 to be proposed at the General Meeting as they intend to do in respect of their beneficial holdings amounting, in aggregate, to 875,000 Ordinary Shares, representing approximately 0.4 per cent. of the Issued Share Capital.
DEFINITIONS
The following definitions apply throughout this announcement, unless the context otherwise requires:
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"Act" |
the Companies Act 2006;
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"Admission" |
the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules;
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"AIM" |
the market of that name, operated by the London Stock Exchange Plc;
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"AIM Rules" |
the AIM Rules for Companies published by the London Stock Exchange;
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"Board" or "Directors" |
the directors of the Company as at the date of this announcement;
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"Capitalisation" |
the proposed capitalisation, conditional on the passing of the Resolutions and Admission of £670,000 of Loan Notes, and £1,058,569.23 of Unsecured Loans at the Placing Price per Capitalisation Share, including £550,000 of Loan Notes held by Sterling Trust, and "Capitalise" and "Capitalised" shall be read accordingly;
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"Capitalisation Shares" |
the 19,206,323 New Ordinary Shares to be allotted and issued pursuant to the Capitalisation;
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"Combined Cycle Generator" |
a combined cycle generator passes the hot exhaust gas from a gas turbine through a heat exchanger which produces steam to drive a secondary turbine;
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"Company" or "Rurelec" |
Rurelec PLC;
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"CREST" |
the computer-based system established under the CREST Regulations which enables title to units of relevant securities (as defined in the CREST Regulations) to be evidenced and transferred without a written instrument and in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the CREST Regulations);
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"CREST Regulations" |
the Uncertificated Securities Regulations 2001 (SI 2001/3755);
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"Daniel Stewart" |
Daniel Stewart & Company Plc, the Company's nominated adviser;
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"EdS" |
Energia del Sur S.A.;
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"EdS Senior Debt" and "Senior Debt"
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the Term Facility and the Hedging Agreement;
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"EdS Shareholder Loans" |
the aggregate for the unsecured loans made by the shareholders of EdS, being the Company and Basic Energy (including, without limitation, the aggregate sum of approximately $30 million (excluding accrued interest) advanced by the Company to EdS);
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"Enlarged Share Capital" |
the 420,671,505 Ordinary Shares in issue immediately following Admission, comprising the Issued Share Capital and the New Ordinary Shares;
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"Executive Directors" |
Peter Earl, Michael Eyre, Elizabeth Shaw and Marcelo Blanco;
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"Form of Proxy" |
the form of proxy for use in connection with the General Meeting;
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"FSA" |
Financial Services Authority;
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"General Meeting" |
the general meeting of the Company, to be held at 5th Floor, Prince Consort House, 27-29 Albert Embankment, London SE1 7TJ at 10.00 a.m. on 28 March 2011 to approve the Resolutions, notice of which has been sent to shareholders with the Circular;
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"Group" |
the Company and its subsidiaries at the date of this announcement;
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"Hedging Agreement" |
the hedging agreement entered into between Energia del Sur S.A. and Standard Bank Plc effective 26 March 2007 and terminating 26 March 2012 (including a confirmation in respect of an interest rate cancellable swap dated 27 March 2007 which incorporates the terms of the 2002 ISDA Master Agreement) as required under the Term Facility;
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"Independent Shareholders" |
the Shareholders other than Sterling Trust;
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"IPC" |
Independent Power Corporation Plc, a company incorporated in England and Wales with registered number 3097552;
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"Issue" |
the Capitalisation, the Placing and the Subscription;
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"Issued Share Capital" |
the 220,671,505 Ordinary Shares in issue as at the date of this announcement;
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"Loan Facilities" |
the outstanding loan facilities available to the Company under the Loan Notes and the Unsecured Loans;
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"Loan Notes" |
the £2,500,000 of convertible 12% loan notes of the Company due on 31 March 2011;
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"Loan Note Indebtedness" |
£670,000 of the Company's indebtedness due to holders of the Loan Notes subject to the Capitalisation;
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"New Ordinary Shares" |
the Capitalisation Shares and the Placing Shares;
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"Notice of General Meeting" |
the notice convening the General Meeting to be held for the purpose of considering and, if thought fit, passing the Resolutions which is set out at the end of the Circular;
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"Option" |
the option to acquire the entire issued capital of Sterling Trust Securities Limited pursuant to the Option Agreement;
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"Option Agreement" |
the agreement between the Company and Sterling Trust Limited pursuant to which the Company has the option to acquire the entire issued share capital of Sterling Trust Securities Limited;
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"Ordinary Shares" |
the ordinary shares of 2 pence each in the share capital of the Company;
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"Panel" |
the Panel on Takeovers and Mergers;
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"Placing" |
the placing of 32,804,055 Placing Shares pursuant to the Placing Agreement;
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"Placing Agreement" |
the conditional agreement dated 11 March 2011 and made between the Directors, Daniel Stewart, and the Company in relation to the Placing;
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"Placing Price" |
9 pence per New Ordinary Share;
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"Placing Shares" |
the New Ordinary Shares to be allotted and issued pursuant to the Placing and the Subscription;
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"Proposals" |
the issue and allotment of 200,000,000 Ordinary Shares at 9 pence per share pursuant to the Placing, Subscription and Capitalisation, the authority to allot up to 15,500,000 Ordinary Shares at 9 pence per share pursuant to the exercise of the Sterling Option, approval of the waiver of obligations under Rule 9 of the Takeover Code and Notice of General Meeting;
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"Registrar" |
Capita Registrars, the Company's Registrar;
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"Regulatory Information Service" |
any service by which companies can disseminate information in accordance with the AIM Rules;
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"Resolution 220 contract" |
a firm capacity power purchase contract between EdS and CAMMESA (the Argentine wholesale market operator), with the tariff denominated in $;
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"Resolutions" |
the resolutions set out in the Notice of General Meeting;
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"Rule 9 Waiver" |
the waiver by the Panel of the obligations of Rule 9 of the Takeover Code that would otherwise be incurred by Sterling Trust;
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"Shareholders" |
a holder(s) of Ordinary Shares;
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"Southern Cone" |
the geographical area of South America comprised of Argentina, Chile, Paraguay, Peru and Uruguay;
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"Sterling Option" |
the option to subscribe for up to 15,500,000 Ordinary Shares at 9 pence per share which the Company has granted to Sterling Trust and which expires on 1 April;
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"Sterling Trust" |
Sterling Trust Limited, a company incorporated in England and Wales with registered number 1761400;
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"STSL" |
Sterling Trust Securities Limited, a company incorporated in England and Wales with registered number 7523554;
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"Subscription" |
the subscription by Sterling Trust and the subscription by Lynchwood Nominees Limited for an aggregate of 147,989,622 Subscription Shares pursuant to the Subscription Agreement;
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"Takeover Code" |
the City Code on Takeovers and Mergers;
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"Term Facility" |
the term facility agreement dated 8 March 2007 (as amended, restated, varied and/or supplemented) between, inter alia, Energia del Sur S.A. as borrower, the Company as guarantor and Standard Bank Plc as arranger and agent;
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"Unsecured Indebtedness" |
Approximately £5.4 million of the Company's indebtedness due to IPC, European Power Systems AG, Technology Finance Limited and Secteur Holdings Limited pursuant to the Unsecured Loans excluding accrued interest;
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"Unsecured Loans" |
the loan agreements;
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"£" |
pounds sterling;
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"$" |
United States dollars;
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