6th Jun 2014 15:17
LONDON (Alliance News) - Rurelec PLC Friday said its pretax loss widened significantly during 2013 as the company received less than expected cash from a claim over a Bolivian asset which was nationalised by the state in 2010.
The power generation company said its pretax loss widened to GBP39.4 million from GBP2.5 million the previous year.
The company announced earlier in June that it had received the payment of GBP19.1 million that it agreed with the Bolivian government, after a four-year battle to get compensation for a stake in the country's largest power producer that was taken from it.
The two sides agreed in May that Bolivia would pay Rurelec GBP19.1 million as settlement after Rurelec spent four years fighting to get compensation after the country's government nationalised its 50.001% stake in subsidiary Empresa Guaracachi, the largest power producer in the country, by force in 2010.
The carrying value of the claim was considered GBP47.0 million at December 31, 2012, and so the company has included a charge of GBP29.5 million in its figures, based on the comparable amount returned. Rurelec also said it posted a GBP4.9 million charge due to the arbitration costs necessary to help end the claim during 2013.
"The results released today are massively affected by the write down we have been forced to take against the book value of our Bolivian assets following the disastrous Arbitration Award of the Permanent Court of Arbitration in The Hague," Chief Executive Peter Earl said in a statement.
However, the company said its revenues increased during the period to GBP15.1 million from GBP13.4 million the previous year after the company acquired Independent Power Corp PLC during the period and developed its operations in Argentina, Chile and Peru.
The company is planning to start commercial operations in Chile from its two greenfield plants, which will add around 295 megawatts to its portfolio, during 2014 and is currently in the final weeks of completing a new hydro plant in Peru.
"With the Bolivian claim now settled and paid, albeit at a fearful cost to us all, I look forward to returning Rurelec to being a reliable power producer, capable of paying dividends and demonstrating growth through hard work and ingenuity," Earl said in a statement.
Rurelec shares were down 1.7% to 7.005 pence on Friday.
By Tom McIvor; [email protected]; @tommcivor1
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