Rurelec to Buy Remaining 50% of Argentina's Energia del Sur

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Researched by Industrial Info Resources (Sugar Land, Texas)--Rurulec PLC (LON:RUR) (London) recently announced that has signed a conditional agreement to buy the remaining 50% of Energia del Sur S.A. (EDS) (Chubut, Argentina). EDS owns the 76-megawatt (MW) Central Termica Patagonia in Comodoro Rivadavia in the Patagonian province of Chubut.

The plant is in the final phase of a combined-cycle conversion project, which began in August 2006. A new steam turbine will be incorporated to the two 38.5-MW General Electric (NYSE:GE) (Fairfield, Connecticut) MS 6001B combustion turbines, which were installed in 1996. Fore more information, see related May 23, 2008, article - Energia Del Sur's Combined-Cycle Conversion Project Nearing Completion.

EDS is owned by Patagonia Energy, which in turn is owned by Basic Energy Limited and Rurelec. Rurelec already owns 50% stake in EDS and will pay $25 million for the remaining 50%.

The proposed acquisition is based on the condition that South Africa's Standard Bank will approve of Basic Energy Limited's removal as a guarantor in relation to the facility. The bank is granting the responsibility to the Patagonia Group. The admission of placing shares is expected before June 28, 2008.

The purchase would be carried out with an initial $12 million cash payment, a further payment of $3 million after three months and $10 million due in one year.

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