Rurelec gets 142m dollar valuation on Bolivian assets

Power generation company Rurelec says independent experts have valued its former assets in Bolivia at 142.2m dollar - the news comes as the company prepares for arbitration following a nationalisation programme in the Latin American country.

Rurelec has now submitted the figure as part of its claim before the Permanent Court of Arbitration in The Hague.

The Bolivian government forcibly transferred Rurelec's subsidiary, Empresa Guaracachi, to the state power firm, ENDE, on May 1 2010 as part of the so called "May Day" programme which brought into state ownership all three of the private power generation companies.

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There is an existing treaty between the UK and Bolivia which the firm says "protects all British companies and guarantees payment of market value in the event of compulsory state nationalisation".

Peter Earl, Chief Executive of Rurelec, said: "I am pleased to report that the $142.2m valuation of our total claims vindicates our efforts to seek full compensation for the loss of Guaracachi. We hope that Bolivia will now pay the compensation that it owes Rurelec for the nationalisation of Guaracachi to enable the Rurelec group to reinvest in replacement power generation assets in Latin America.

He added: "In the event of a settlement, we are committed to using part of any proceeds to a significant buy-back of Rurelec shares in order to reverse some of the equity dilution suffered by shareholders".

Rurelec shares had gained 1.3% by 11:39 in London. Since the nationalisation, the stock has dropped 35%.

BS