LONDON (ShareCast) - IPSA Group, the AIM-listed owner and operator of power generation capacity in southern Africa has agreed to the conditional sale of two Siemens Westinghouse 701 DU turbines to Rurelec.

IPSA said that Rurelec, an operator of power generation assets in Latin America also listed on AIM, would pay a total consideration of approximately £16.1m ($25m), of which £11.9m would comprise the initial consideration, and the balance of £4.2m would be deferred on specific agreed terms.

The group said that the initial consideration of around £11.9m would be funded by the allotment and issuance of 95.5m Rurelec shares of 2.0p each at an issue price of 12.5p per Rurelec share.

Currently, IPSA has significant indebtedness and is reliant on the continuing co-operation of its creditors. In particular, so-called Bluestone loans totalling approximately £6.3m which it said would need to be repaid on or before June 27th 2013.

As a result of the sale, and following admission, IPSA's said that its indebtedness would be significantly reduced by approximately £10.9m, including the Bluestone debt.

Richard Linnell, Chairman of IPSA, commented: "Reaching an agreement to sell the Turbines allows IPSA to progress its business in southern Africa once released from its significant burden of debt. It is a major step forward for IPSA, although working capital will remain tight for the foreseeable future."

IPSA’s share price was unchanged at 3.50p at 08:33 on Monday.

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