LONDON, UK: Rurelec PLC, an independent power producer with operations in Latin America, has agreed to sell its Argentinian assets to a consortium of local investors for up to USD 5m (c£4m). The deal is subject to shareholder approval and is expected to complete in June 2023.

The Argentinian assets include Rurelec’s 50% stake in Patagonia Energy Ltd, which owns a 138MW combined cycle power plant in Comodoro Rivadavia. The plant has been facing challenges due to payment delays, fixed tariffs, maintenance costs and competition from renewable sources.

The buyers are Verafont S.A., Basic Energy Limited and Mr. Esteban Reynal, who already own the other 50% of Patagonia Energy Ltd. They will pay USD 3m (c£2.4m) upfront, of which USD 600,000 (c£475,000) has been deposited in escrow, and up to USD 2m (c£1.6m) in deferred payments depending on the performance of the plant.

Following the completion of the sale, Rurelec intends to pay a special dividend of 0.20p per share to shareholders, in line with its strategy to return capital to shareholders. The company will also retain some of the proceeds for working capital purposes.

The sale is a fundamental disposal under the AIM Rules and requires shareholder approval. A general meeting will be held on 1 June 2023 at 10.00 am in London. Sterling Trust Limited, which holds 53.99% of Rurelec’s shares, has irrevocably committed to vote in favour of the sale.

Rurelec also announced the appointment of Keith Muller as its new Chief Executive Officer and Len Kolff as its Head of Business Development & Chief Geologist. Mr Muller joined the company in November 2022 as Chief Operating Officer and has over 20 years of experience in hard rock lithium mining and processing. Mr Kolff has been with the company since its inception and served as interim CEO since March 2022 following the passing of founder Vincent Mascolo.

Neil Herbert, Executive Chairman of Rurelec, said: “The sale of our Argentinian assets will provide us with much needed liquidity and allow us to reward our loyal shareholders with a dividend. We believe that the Argentinian assets are best owned by local investors who have a better understanding of the market conditions and challenges. We thank our joint venture partners for their cooperation and support over the years.”

He added: “We are delighted to welcome Keith as our new CEO and Len as our Head of Business Development & Chief Geologist. They bring a wealth of experience and expertise to our company and will lead us through the next phase of our development.”

Rurelec’s main remaining asset is the 701 Turbines, which are two gas turbines that were seized by the Bolivian government in 2010. The company is pursuing an arbitration claim against Bolivia for compensation.

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