3rd Feb 2014 06:49
LONDON (Alliance News) - Rurelec PLC Saturday said the Permanent Court of Arbitration in The Hague confirmed a finding in favour of the company with regards to its Bolivian compensation claim.
Rurelec 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, the power generation company 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.
The Permanent Court of Arbitration in the Hague heard the case last April and released its long expected arbitration award of compensation to Rurelec on Saturday with Rurelec announcing the full payment details Sunday.
This is the first such arbitration award granted by an international court against Bolivia.
"I am delighted that the waiting is now over and we can at last analyse all 199 pages of the judgment and see what this award is worth in monetary terms to Rurelec," Chief Executive Peter Earl said in a statement.
"The greatest gift we have received overnight from the Arbitration Panel is certainty so that we can at last fulfil our primary objective of building in Chile and Peru the new power plants which replace the net 270 MW of generation capacity which were taken from us, against our will, almost four years ago," Earl said.
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 Earl has often mentioned the figure of USD75 million, excluding costs and interest.
The company has previously said that, if successful, some of the cash will be given back to shareholders by way of a special dividend.
"The result is a vindication of the long and difficult hours we have put in to get compensation for our shareholders who had suffered a great wrong," Earl said.
In August, the company was granted an exclusive right to a new project in Peru, which if it goes ahead, will see the company build a gas-fired 120 megawatt power plant in the Amazonian region of northern Peru.
In December, Rurelec's hydroelectric subsidiary Cascade was awarded three new power purchase agreements in Peru totalling 30 megawatts.
Rurelec shares were up 9.4% to 14.50 pence at the end of trading on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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