REG - Rurelec PLC - Trading Update

RurelecAnnouncement

25/01/2023 07:00

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RNS Number : 7487N  Rurelec PLC  25 January 2023

 

 

25 January 2023

 

Rurelec PLC

("Rurelec" or the "Company")

 

Trading Update

 

The Company's financial condition and prospects remains in line with the
position reported on 30 September 2022. There has been no further receipt of
cash from Argentina; cash at the bank on 31 December was £ 400k and based on
the Company's current cash burn it is anticipated that if no further action is
taken this will provide sufficient working capital until around the middle of
 the second quarter of 2023. The Macro economic situation in Argentina is not
favourable to Energia del Sur, S.A. ("EdS"), the company which owns and
operates the 136 MW Southern Patagonia CCGT power plant in Argentina in which
Rurelec has a majority interest. As a consequence it is unlikely that EdS will
be able to pay dividends to Rurelec in the short term.

 

In addition, the Directors note that the Company does not have shareholder
authority to issue any new shares. The Directors have consulted with the
Company's majority shareholder seeking support for a shareholder resolution to
allow the issuance of new shares. At the current time that shareholder is not
minded to support such a resolution and has not indicated that this is likely
to change. Accordingly Shareholders should be aware that Rurelec does not have
the flexibility to access the equity capital markets for funding, and
therefore the Company may not be able to raise working capital on reasonable
terms, or at all.

 

There has, however, been continued interest in recent months for the Company's
major assets which Rurelec is seeking to dispose. In particular, the directors
of Rurelec are in discussions to agree heads of terms with an overseas
counterparty to dispose of the Company's ultimate interest in EdS in
Argentina, which if consummated in the anticipated timeframe could resolve the
uncertainty surrounding the Company's working capital position. It should be
noted that, depending on any future negotiated terms, any disposal of the
interest in Argentina is likely to be considered a fundamental disposal by the
Company pursuant to AIM Rule 15 of the AIM Rules for Companies. That being the
case, any such disposal would be conditional on shareholder approval and be
accompanied by a publication of a shareholder circular. In addition, it is
possible that following such disposal, the Company would be regarded as an AIM
Rule 15 cash shell with additional regulatory consequences.  However, given
the preliminary nature of such discussions there can be no certainty that this
initiative will conclude in time, or at all. Further updates will be provided
in due course as appropriate.

 

In summary, Rurelec's liquidity position will become acute during the second
quarter of 2023.

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

For further information please contact:

 

 Rurelec PLC             W H Ireland (Nomad & Broker)
 Andy Coveney, Director  Katy Mitchell

 Tel: 020 7549 2839/40   Tel: 020 7220 1666

 

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