13th Apr 2016 16:20
LONDON (Alliance News) - Rurelec PLC on Wednesday said it has increased its existing short-term loan facility with Bridge Properties (Arena Central) Ltd to GBP1.2 million and has drawn down a further GBP150,000 from the facility.
However, Rurelec said its cash position continues to be "extremely tight".
In February Rurelec said it had entered into and fully drawn down a GBP850,000 loan facility with Bridge Properties and, on Wednesday, said it had increased the facility by GBP350,000.
The proceeds are for working capital purposes, Rurelec said, as well as for its operations in Chile and Peru.
The repayment date for the facility is June 30, with interest at 1% per month.
Rurelec added that receipts in the first part of 2016 from its Argentine joint venture, Energia del Sur SA, had been "significantly below forecast", which it said was largely due to structural changes in the Argentine electricity market.
As such, the subsidies from the state are being reduced whilst at the same time prices to the end users are being increased, Rurelec said.
"Whilst the company expects these changes and Argentina's widely reported exchange controls relaxation will be beneficial to the company, the short term effect has been that Energia del Sur has moved from collecting debt from 45 days of revenue to 90 days of revenue," Rurelec said in a statement.
The company said it expects cash receipts for the full year to be at a similar level as 2015.
Shares in Rurelec closed up 5.9% at 1.35 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
RUR.L