16th Sep 2014 08:01
LONDON (Alliance News) - Shares in power generation company Rurelec PLC were higher in early trading on Tuesday after the company said it is progressing with work on its Chilean and Peruvian businesses and said its Argentina arm continues to trade at record levels, with the company now pursuing potential alliances in Latin America to allow it to further accelerate its growth.
Shares in the company were trading 14.3% higher at 6 pence per share on Tuesday, making it the second best performer on the AIM All-Share index.
Rurelec said its Termonor subsidiary in Chile has given notice to the relevant authorities in the country for the start of works at the Parinacota project in Africa, with expectations that preliminary works will begin in mid-October.
The company is currently assessing offers to acquire 50% of Termonor and is expecting to complete a sale of the stake at a premium to book value. The group expects to secure the debt needed to complete the Termonor project and the equity on the Parinacota project has been paid up by the company.
Rurelec is also assessing offers for 50% of the Central Illapa project and expects to complete a sale at a premium to book value. It is set to complete financing and start construction at the project in early 2015, subject to finalising negotiations with a partner.
In Peru, the company's Cascade Hydro run-of-river hydro arm, has competed construction work on the Canchayllo project, which is due to enter service by the end of September. The group has agreed a deal to sell a substantial stake in the project which will allow the Cascade business to repay third-party loans and release funds to Rurelec.
The group is also in the process of negotiating partnership arrangements for small hydro and large hydro sites in Peru. The Peruvian government recently announced the Proinversion tender process for large hydro power purchase agreements will start in October and Rurelec said it expects to be among the leading contenders for a large hydro PPA.
In its Argentinian business, the company said its Energia del Sur plant, based in Comodoro Rivadavia, is continuing to trade at record levels and said it is reported to be the highest availability plant in Argentina.
The group said it is currently exploring one or more major alliances in the Latin American market, part of a wider strategy at the company to accelerate its growth without the need to request more capital from shareholders and to restart its dividend payment programme.
"We have a strong platform of projects and we have a presence in the key markets of Latin America which are increasingly attractive to investors. Our recent share price performance significantly undersells the value of what we have put together in recent years," said Rurelec Chief Executive Peter Earl.
By Sam Unsted; [email protected]; @SamUAtAlliance
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