5th Feb 2014 12:10
LONDON (Alliance News) - Rurelec PLC Wednesday confirmed that it plans to use some of the proceeds of its recent Bolivian arbitration award to make a dividend distribution to shareholders.
On Saturday, the power generation company was told that the Permanent Court of Arbitration in The Hague confirmed a finding in favour of the company with regards to a protracted dispute against the Bolivian government.
On Wednesday, the company said that upon receipt of the compensation, it expects to have a cash surplus of USD16 million.
Rurelec had previously said that it plans to give part of the proceeds back to shareholders by way of the special dividend it announced Wednesday.
The company spent 2013 fighting to get compensation after the Bolivian government nationalised its 50.001% stake in subsidiary Empresa Guaracachi, the largest power producer in the country, by force in 2010.
On Sunday, Rurelec said the court granted immediate compensation of USD35.5 million to Rurelec, who noted that the award is higher than the GBP20.6 million which the company paid to acquire its controlling stake in Guaracachi in 2006.
The company said a further USD5.5 million is due to be paid back to Rurelec by Guaracachi itself in the form of declared but unpaid dividends going back to the time before nationalisation, taking the total payments due to Rurelec to USD41 million.
"Rurelec is confident that Bolivia will comply with its obligations towards Rurelec and the UK under the Treaty and looks forward to prompt settlement of the amount awarded," the company said in a statement.
In April 2013 however, the company's independent valuation experts said the valued return of the expropriation claim could be as large as USD142.3 million, while Earl has often mentioned the figure of USD75 million, excluding costs and interest.
This is the first such arbitration award granted by an international court against Bolivia.
The company also noted that it continues to wait for final approval in Chile for its shares to be permitted to trade on the Santiago Stock Exchange under a dual listing arrangement.
Rurelec shares were down 4.9% to 9.75 pence Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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