Rurelec Share Discussion Threads

[cheshire2] 30/4/2014 23:59

Now this has been put to bed they can now concentrate 100% on moving the company forward.

[cheshire2] 30/4/2014 23:50

In early May, the Bolivian State shall pay to the British Rurelec for the nationalization of the shares of Guaracachi SA ( EGSA ) , the amount established in the award determined by the Permanent Court of Arbitration in The Hague (PCA its acronym in English ) , in exchange for the company to give up a portion of the dividends not paid generated before expropriation, may 1, 2010 . that was the agreement came after several negotiations with the Attorney General and the technical team.

"Under these terms Rurelec accept surrender part of their entitlement to payment, including an agreement to give up the uncalled capital of the company Guaracachi payment in exchange for prompt payment of the grant during the first part of May," indicates part of the press release translated from English.

Rurelec initially reported that the Bolivian state should pay $ 41 million , divided into two parts: the first, a total compensation of 35.5 million for the January 31, 2014 and another 5.5 million as payment dividends received before the expropriation .

However, the Bolivian government said the amount set was $ 28.9 million plus interest figure lower than that initially demanded by the nationalization of 50 percent of its stake in the electricity generator .

The November 24, 2010 , Rurelec PLC sued Bolivia for the nationalization of its shares in the Empresa Eléctrica Guaracachi SA ( EGSA ) , on May 1, 2010 . ) . The January 31, 2014 , the Permanent Court of Arbitration in The Hague issued the ruling.

still not clear what the total payment will be. will have to wait and see if rurelec come clean after payment.

[meijiman] 30/4/2014 12:38

I think P Earl should take Morales out for a slap up dinner and moreover crave his indulgence..............

[abcd1234] 30/4/2014 12:34

correct giantsteps/joeblogg.....
from the earlier rns,,, re the divi.....

~~~~~~~~~~~~~~~~~~~~~~~
"A further US $5.5 million remains due to be paid to Rurelec by Guaracachi itself in the form of declared but unpaid dividends going back to the time before nationalisation. "
~~~~~~~~~~~~~~~~~~~~~~~~~~

[bones30] 30/4/2014 12:33

Well, I'd say a few million less from the award, but now, is a heck of a lot better than the full award but not till 2099...

[joeblogg2] 30/4/2014 12:26

yes looks like it part of the original award which I suppose is good so that it is paid otherwise who knows how long they drag this along.

[giant steps] 30/4/2014 12:14

Update on Bolivian Award and Birdsong Loan

RNS 30th April 2014





Do we assume saying goodbye to US $5.5 million 'unpaid' dividends ?
See Link

[gerhart] 24/4/2014 13:22

I hope if, as we think, that the ruling is legally enforceable, that the BOD just tell the Bolivian bandits to go and take a run and then - legally enforce the ruling. Send in the heavies!

[malctim70] 24/4/2014 08:44

Thank you for the translation. Should hear something by next week then when the 90 days expire

[cheshire2] 24/4/2014 08:13

La Paz |

The Government holds talks with the company Rurelec to lower the amount of the award which determined the Permanent Court of Arbitration in The Hague for the nationalization of Guaracachi SA ( EGSA ) and if an agreement is not reached the decision is impugned , he said yesterday State attorney General (PGE ), Hector Arce Zaconeta .

" We are trying , through the path of negotiation , which obligations of the company ( Rurelec ) to quantitatively lower that amount, otherwise we will use the mechanisms ( ... ) If not ( an agreement is reached ) mechanisms are recognized and procedures that allow the challenge of this situation , it is a fact that is in a framework of negotiations, "he said.

On January 31 , the Permanent Court of Arbitration at The Hague informed the Bolivian state with an award which has Rurelec payment of U.S. $ 28,927,583 , plus interest from May 2010, the nationalization of 50,001 percent of its Guaracachi shares in the Company .

The General exprocurador State , Hugo Montero said on February 5 that the State has 90 days to take a position on the ruling by the Hague and it runs from the time when it was notified on 31 January.

" If the company is willing to still recognize some obligations pending to lower the amount of the award ( Arbitration ), if that situation would , of course , you can open a dialogue for the performance of this award "he said Arce.

According Rurelec , the Bolivian state should pay $ 35.5 million in compensation, plus 5.5 million dividends received before nationalization of EGSA , added the two figures the amount is $ 41 million .

After the ruling and issued before the notice of appeal by the Government , constitutional lawyers Jose Antonio Rivera and Victor Gutierrez said is binding and conclusive compliance.

"The ruling is final , are comments ( ... ) have no legal grounds ," said Gutierrez then on the claims of the Government.

Arce 's statements were made after the signing of an inter-institutional cooperation with the Minister of Transparency , Nardi Suxo for joint sanctioning corruption actions.

[ukpatco] 24/4/2014 08:12

Google Translation:-
The Government holds talks with the company Rurelec to lower the amount of the award which determined the Permanent Court of Arbitration in The Hague for the nationalization of Guaracachi SA ( EGSA ) and if an agreement is not reached the decision is impugned , he said yesterday State attorney General (PGE ), Hector Arce Zaconeta .

" We are trying , through the path of negotiation , which obligations of the company ( Rurelec ) to quantitatively lower that amount, otherwise we will use the mechanisms ( ... ) If not ( an agreement is reached ) mechanisms are recognized and procedures that allow the challenge of this situation , it is a fact that is in a framework of negotiations, "he said.

On January 31 , the Permanent Court of Arbitration at The Hague informed the Bolivian state with an award which has Rurelec payment of U.S. $ 28,927,583 , plus interest from May 2010, the nationalization of 50,001 percent of its Guaracachi shares in the Company .

The General exprocurador State , Hugo Montero said on February 5 that the State has 90 days to take a position on the ruling by the Hague and it runs from the time when it was notified on 31 January.

" If the company is willing to still recognize some obligations pending to lower the amount of the award ( Arbitration ), if that situation would , of course , you can open a dialogue for the performance of this award "he said Arce.

According Rurelec , the Bolivian state should pay $ 35.5 million in compensation, plus 5.5 million dividends received before nationalization of EGSA , added the two figures the amount is $ 41 million .

After the ruling and issued before the notice of appeal by the Government , constitutional lawyers Jose Antonio Rivera and Victor Gutierrez said is binding and conclusive compliance.

"The ruling is final , are comments ( ... ) have no legal grounds ," said Gutierrez then on the claims of the Government.

Arce 's statements were made after the signing of an inter-institutional cooperation with the Minister of Transparency , Nardi Suxo for joint sanctioning corruption actions.

[malctim70] 24/4/2014 08:00

Anyone able to translate this dated 23 Apr

[john6185] 12/4/2014 17:54

Thanks. A very pleasant and reassuring article.Price should be back in the teens soon. Ironically the Arbitration case probably did more harm than good for RUR, as this real business was overshadowed my the court drama.

[pukeho] 12/4/2014 13:42

Excellent article indeed, Swooped. This is exactly what attracted me to the Company back in 2011. I still have the same warm feeling as I did then. Getting on in age I hope I see the projects come to fruition. The future for the company is very bright( no pun intended) IMO

[swooped] 12/4/2014 12:43

Be patient this is about Rurelec, read the article it gives a great impression of where Rurelec may be going, it was taken from Money week 8th April 2014.

"Hell on Earth"

From James McKeigue, in Mexico
Dear New World reader,

Los Porteños, the citizens of Buenos Aires, are used to hot summers. But this year, things got out of hand. The weather was more than uncomfortable – it was dangerous.

A friend of mine, a local, described it as "Hell on Earth". The city of 12 million people was converted into a giant cooker as temperatures hit 38 degrees Celsius. The sweltering conditions caused electricity demand to spike, because people turned up their air conditioning units. And that's when the situation got really bad.

The record power demand was too much for Argentina's creaking power grid, which crashed under the pressure. With fatalities mounting and power shortages lasting several weeks, locals took to the streets to vent their anger. They blocked roads with burning tyres and banged on cooking pots in their customary protest style.

I've spent a few years in Buenos Aires, and it's one of my favourite Latin American capitals, but after speaking to my friend all of a sudden the British winter didn't seem so bad...
________________________________________

Argentina's "inferno" will spread

The Buenos Aires heat wave sparked a round of finger pointing between the government and private energy companies. The ruling party blames profiteering energy firms, while the energy suppliers blame the country's national grid. There have been all sorts of proposals, from expanding power imports to implementing daylight saving time. But the only feasible long-term solution is to invest more in Argentina's power generation and distribution network. And at the moment I don't see that happening.

With weather now back to normal, the creaking electricity system will be able to limp on for a bit longer. And with the political class trying to stave off a possible recession while gearing up for next year's elections, no one is going to make the hard decisions needed to fix the problem.

But this isn't just an Argentine issue. Power demand is booming across Latin America and the region's electricity infrastructure is struggling to cope. The World Bank expects Latin America power consumption to more than double between 2010 and 2030 and estimates that $430 billion of investment will be needed to meet demand. And as companies and governments look for foreign capital to fund the investment it should throw up opportunities for New World readers.

Latin America's power problem

Almost anywhere you look Latin American countries have power problems. In Colombia the guerrilla group the FARC spent most of 2013 blowing up remote, rural power infrastructure. Meanwhile, in Chile the problem isn't that stations are being blown up but that they're not being built in the first place. The country, which is Latin America's richest per capita, has a strong environmental movement whose protests have postponed several power projects. For example, the new government of Michelle Bachelet recently shelved a plan for a hydroelectric plant in Chile's glacial region, following complaints from environmental protestors.

In Brazil plans for large new hydro stations have also been set back by environmental protests. The delays are a big problem for a country with a history of blackouts that occur when low rains hit output at the existing hydro plants. And over in Mexico the situation is more complex. On the face of it, the energy reforms should create huge opportunities for private power companies. But in practice it will take time for the dust to settle. I recently interviewed one of the commissioners at the Mexican energy regulator and he explained to me that there would likely be delays while new bodies created by the reforms carved out their own fiefdoms in the power industry.

But as serious as some of the challenges are, Latin America can't afford to wait. In Chile power demand is being driven by the country's mining sector, which makes up more than half the country's annual exports and a fifth of its GDP. The sector's energy consumption has increased 60% over the last decade to nearly 24 terawatt hours (TWh), and is expected to nearly double again by 2020.

As for Brazil, its growing population and rapidly expanding middle class is pushing up electricity consumption. It's believed that Brazil needs to add about 6,000 megawatts (MW) of new power generation capacity every year for the next decade. To give that some context, Britain's biggest power station, the coal and biomass-fired Drax station in Yorkshire, has a nameplate capacity of almost 4,000 MW.

Mexico, with its rapidly expanding industrial centre, is another country where consumption is climbing fast. It's estimated that power demand will rise by around 2,000 MW per year.


Here's how LatAm can avert an energy crisis

It's clear that Latin America is going to build lots of power stations and transmission lines over the next few years – the question is: what type of energy will they produce?

At the moment Latin America's power matrix has a unique profile. It is dominated by hydropower, which generates around 65% of the total and gives Latin America the least carbon intensive power system in the world. But in recent years hydropower's position in Latin America has started to slip as the huge mega projects that were so popular with the region's dictators proved harder to pass in the democratic era.

So governments have turned to natural gas, with plants that can be built quickly and are less likely to attract environmental opposition than coal or oil. In Brazil, Mexico and Argentina demand for gas now outstrips local production and they have been forced to turn to expensive LNG (liquefied natural gas) imports. That pushes up the overall cost of power generated from gas but eventually all three should begin to tap their own considerable shale gas reserves.

Another interesting growth area – albeit from a tiny start point – is renewable energy. For example research group IHS believes that Latin America will install 700 MW of solar panels this year. That's a tiny amount of power but more than double the amount for 2013. In total Latin America's solar industry is expected to grow at 25% per year for the next decade. Wind, which is much more established in Latin America, is also expected to grow sharply. A report from Navigant Consult calculates that Latin American countries will install 33.5 gigawatt (GW) worth of wind farms between now and 2022, which clocks up at a growth rate of more than 20% per year.
________________________________________


How to invest in Latin America's energy transformation

We looked at this theme back in March 2013 when I noted that Spanish wind turbine maker Gamesa had heavy Latin American exposure and was well-placed to benefit from the region's power problem. Well since then it's gone up more than 300%, making a handy profit for anyone who took me up on my advice. But even though I am still bullish on Latin American renewable energy, I don't think I would buy back into Gamesa today. It's a lot more expensive than when I first tipped it.

Instead, I like the look of Aim-listed Rurelec, a small independent power producer that focuses on Latin America. The firm hit the headlines in 2010, when one of its biggest assets was nationalised by Bolivian president Evo Morales. Since then any commentary on the stock has focused on if it will get compensation from the Plurinational State of Bolivia. An arbitration court in The Hague recently ruled that Rurelec should get about $50 million, though the Bolivians are taking their time to pay up. The problems have battered the share price.

While it's understandable that this dispute dominates coverage of the stock, I am more interested in some of the company's other moves. Since receiving a lesson in Latin American populist politics from Morales, the firm has decided to focus on some of the region's more business-friendly countries. It is building a gas-fired plant in Chile and snapped up hydropower assets in Peru. Regular readers will remember that both countries are part of the Pacific Alliance, the exciting new Latin American trade bloc, and are committed to attracting international investors.

In Chile Rurelec is building a modern 250 MW combined cycle (which basically means that it is more efficient) gas power plant. Given current objections to hydro and coal in the country, gas seems the most likely to escape the protestors' ire. Rurelec's customers will be mining companies in the north of the country, who are more than happy to pay a good price for reliable sources of power. The company has also applied for a secondary listing on the Chilean stockmarket. If successful the move could boost the share price as Chilean power companies tend to trade at a premium.

Rurelec also made a move into renewables by acquiring a portfolio of small greenfield hydro projects in Peru. The plants are at different stages of development – some are being built while others are still just plans – but in total it gives Rurelec the right to develop about 300 MW worth of hydropower in the country. One advantage with these small 'run of the river' projects is that they don't require huge dams and thus avoid the protests and delays that hit larger projects. They can also be a good way of supplying electricity to remote places that are far from the grid. Finally Rurelec also has a 50% share in a 136 MW gas-powered plant in Argentina.

Don't get me wrong, this stock has plenty of risks. The share price has fallen 50% in the last few months alone. But I think its strategy of targeting business-friendly countries with a power crunch is a sound one.

Until next time,

James McKeigue

The New World

[sparty1] 11/4/2014 12:25

100K buy @ 9p ..fair amount and more than I`ve got spare.. :(

[sparty1] 11/4/2014 11:51

cant buy more than 10K ..ask is currently 9p and has been taken for 55K .. low volume cause you cant buy high volume..!

[sparty1] 11/4/2014 11:03

buyers back @ 8.75 ..about time it woke up..

[sparty1] 11/4/2014 09:07

well someone has paid 9.04 this morning.confidence returning..

[meijiman] 10/4/2014 14:17

Deutsche Bank reckon that there are 19 regional markets where there is grid parity for photovolaic solar panels eg solar can match or undercut local electricity prices without subsidy. One of these is Chile --but that's for residential. Inference is that it will also happen for industrial power.Interesting that saudi Arabia is investing over $100bn in solar.

[malctim70] 10/4/2014 14:04

Ok....so either the Bolivians know nothing or they're not greedy gits like me

[mountain man] 10/4/2014 10:27

Swooped
Agree with you. I recently took advantage of the drop and increased my holding. As I said before - I'm in for the longer term and looking forward to the progress. Can't see how The Hague can entertain meaningful discussions about Chile unless Bolivia demonstrate they can abide by decisions made. They have a few days left to start discussions with at least a little credibility.
DYOR

[malctim70] 10/4/2014 10:26

A Moralas holding rns would be amusing.
Have to say though, if I was a Bolivian with inside info and thought I could double my money in a few days, I may well be tempted.
They're 5 hrs behind. Be interesting to see if trades incr after 1pm.