6th May 2014 10:04
LONDON (Alliance News) - Rurelec PLC Tuesday said that the Attorney General of Bolivia had confirmed in a press conference over the weekend that the country will pay the company USD31.5 million in May, as settlement for seizing the company stake in the country's largest power producer in 2010.
Rurelec last week said it had reached a deal with Bolivia over the payment of compensation for the nationalisation of its stake, agreeing to waive some of the company's entitlement in return for a fast payment in early May.
The power generator with assets in South America has spent over three years 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.
In February of this year, the Permanent Court of Arbitration in The Hague granted immediate compensation of USD35.5 million to Rurelec. A further USD5.5 million was due to be paid back to Rurelec by Empresa 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 last week said its agreement to waive some of its entitlement in return for speedy payment of the rest included the unpaid dividends from Empresa Guaracachi. It didn't say how much it had agreed to waive in total.
At that time, Rurelec said it now expects to be able to pay its loan facility with Birdsong in full within the first two weeks of May. The company raised at USD15.45 million loan from Birdsong in July 2012 to fund the development of Rurelec's assets in Peru and Chile.
Rurelec shares were down 3.6% at 6.75 pence Wednesday.
The stock fell sharply in February after the award by the arbitration court in the Hague fell short of previous estimates of the possible claim. In April 2013, the company's independent valuation experts said the valued return of the expropriation claim could be as large as USD142.3 million, while Rurelec Chief Executive Peter Earl had often mentioned a figure of USD75 million, excluding costs and interest.
The company had previously said that, if successful, some of the cash would be given back to shareholders by way of a special dividend. However, it has not said anything about this in recent announcements.
By Steve McGrath; [email protected]; @SteveMcGrath1
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