LONDON (ShareCast) - (Sharecast News) - Rurelec has received a further $1.44m (?1.11m) by way of partial repayment by Patagonia Energy (PEL) of the amended and restated loan note, it announced on Friday, with the majority of that sum received earlier in the week.
The AIM-traded firm said the balance outstanding was around $21.27m, with the first $5m of repayment shared 80-20 between Rurelec and Basic Energy - the ultimate shareholders of PEL - and then the balance paid at a ratio of 72-28 thereafter in favour of Rurelec.

It said the total amount owing to Rurelec was now $15.48m.

"However, whilst the agreements ... determine how funds generated by PEL will be distributed, the timing of future payments is not certain," the Rurelec board warned.

It said the payments were dependent on the potential future cash generation ability of Energia del Sur (EdS), which operates the Argentina power project, as well as the duration of exchange controls that both restrict the ability of EdS to transmit funds to PEL and increase the money conversion cost of achieving those transfers.

They also depended on delays being experienced by electricity generators in Argentina in receiving payments of revenue from CAMMESA - the wholesale electricity market regulator and administrator.

"Accordingly, there can be no guarantee as to when any further loan repayments will be made."

Rurelec's board also noted the increased foreign exchange risk for the group as a result of the recent policy change announcement by the Argentina government, that revenue deriving from the electricity generated by EdS from its gas turbines and sold on the energy spot market would no longer be linked to the US dollar, but to the Argentine peso.

That would be calculated retroactively to February and would be updated monthly from March onwards.

Revenue deriving from the 43.7 MW of electricity generated under EdS's resolution 220/2007 power purchase agreement, which sets the tariff for the output from EdS's combined-cycle steam turbine, would however still be linked to the dollar.

"The directors also note that this power purchase agreement expires on 9 September, and will be superseded by a new tariff or, at worst case, be sold on the energy spot market," the board added.

"The remuneration level of that tariff [and] power purchase agreement is the subject of ongoing discussions with CAMMESA, the outcome of which is currently uncertain.

"There is no guarantee that those terms will be favourable to EdS or that, as a consequence of these changes, EdS will remain economic although the directors remain optimistic as to a sensible resolution."

Rurelec said further updates would be provided in due course.

At 0942 GMT, shares in Rurelec were down 25.39% at 0.43p.

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