Rurelec’s Argentine refinancing plans boosted by loan amendments

Rurelec (LON:RUR) has agreed amendments to the terms of unsecured convertible loan notes, which the company believes will assist it in the re-financing of its Argentine subsidiary Energia del Sur S.A. (EdS). The loan note holders have agreed to roll-up the payable interest, until maturity on the 31st March 2011, and the conversion price has dropped from 25p per share to 13.75p.

The unsecured £2.5m convertible loan notes carry a 12% coupon.

"I am delighted that holders of the convertible loan notes have given their support to the company's refinancing plans,” Rurelec chief executive Peter Earl commented.
Rurelec also told investors that it continues to negotiate with the government of Bolivia to agree a settlement to expropriation claims - as compensation following the forced nationalisation of Rurelec's Guaracachi power generation business earlier this year. On 1 May, Bolivia’s President Morales issued a ‘Supreme Decree’, which forcibly nationalised Rurelec’s 50.01 percent stake in its Bolivian subsidiary Empresa Guaracachi, along with the separate Bolivian operations of fellow British companies BP (LSE: BP) and BG (LSE: BG).
The decree stated that state power company ENDE must pay fair value for the stake, held by Rurelec’s subsidiary Guaracachi America Inc (GAI).
Later, on 13 May, Rurelec served a formal notice of a breach of the Bilateral Investment Treaty (BIT) between the UK and Bolivia on President Evo Morales, thereby triggering the six month negotiating period prior to international arbitration.