| Wed 20 Jul 2011, 16:30 | | IPS - IPSA - Sale of Turbines |
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IPS
IPSA
IPS - IPSA - Sale of Turbines
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA ISIN GB00BOCJ3F01
JSE Share Code IPS ISIN GB00BOCJ3F01
("IPSA" or "the company")
Sale of Turbines
IPSA Group PLC (AIM:IPSA), the developer, owner and operator of power generation
capacity in Southern Africa, announces that that it has entered into equipment
sale agreements in respect of its four Siemens Westinghouse 701 DU gas turbines
for an aggregate consideration of USD66 million (GBP41 million at yesterday`s
exchange rate).
Bright Day Pte Limited ("Bright Day"), a Singapore-based investment company, has
agreed to purchase two of the Turbines (the "Bright Day Agreement") for its
barge-mounted projects under development.
Under the Bright Day Agreement, which was executed on 19 July 2011, two turbines
have been sold for the aggregate consideration of USD35 million. A deposit of
USD2 million is payable, with the balance due no later than 120 days from
signature. The Bright Day Agreement is conditional upon, inter alia, the
agreement of IPSA`s two main creditors, Standard Bank PLC (the "Bank") and
Turbocare SpA ("Turbocare"). However, under the terms of the agreement, this
condition precedent may be waived at Bright Day`s sole discretion. A further
announcement will be made when appropriate.
Bridgehouse Capital Limited ("Bridgehouse"), a private equity investment and
advisory firm, has agreed to purchase the second pair of turbines ("the
"Bridgehouse Agreement").
Under the Bridgehouse Agreement, which was executed on 15 July 2011, the two
turbines have been sold for aggregate consideration of USD31 million. This
agreement is conditional upon the agreement of the Bank and Turbocare. However,
under the terms of the agreement, this condition may be waived at Bridgehouse`s
option, and the waiver of Bridgehouse has now been received.
Of the total purchase price in the Bridgehouse Agreement, a deposit of USD3.9
million in aggregate is payable by way of a payment of USD2 million in cash and
the cancellation of loans made by Sterling Trust Limited and Independent Power
Corporation PLC ("IPC"). The balance of the consideration is due within 120
days of the date of this agreement.
IPSA has agreed that all proceeds from the two sales contracts, including the
deposits, will be paid into a trust account to be operated by the Bank and
Turbocare, who will receive funds ahead of all other creditors. Thereafter,
funds will be released to the Company. The Directors anticipate that following
receipt of all the proceeds, the Company will be in a position to settle with
all its creditors and that it will retain sufficient working capital for its
current operational needs for the foreseeable future. Our wholly-owned
subsidiary continues to show positive cashflow, and the Directors remain hopeful
that a satisfactory resolution in respect of the GBP4m dispute with Sasol Gas
Limited can be achieved.
The latest reported carrying value of the assets held for sale was GBP31.6
million as set out in the annual report dated 31 March 2011. However, the
working capital position of the Company will remain tight until the sale of the
Turbines is complete. Additional working capital for the intervening period
will be required to pay operating expenses and repay the Loan Notes due on 31
July 2011, unless the repayment period is extended.
Commenting, Richard Linnell, Chairman of IPSA, said:
"I am pleased that we finally have sale agreements for all four of the Turbines.
It has been a long process but I am delighted that we now have clarity and an
acceptable quantum from the sale of these IPSA assets. Our original plan was to
install the turbines in South Africa but, as a result of the changes in economic
circumstance since 2008, other countries will now benefit from these excellent
machines.
IPSA shareholders will be pleased to note that the headline price of the
turbines is considerably more than IPSA paid for them four years ago."
20 July 2011
For further information contact:
Peter Earl, CEO, +44 (0)20 7793 5615
IPSA Group PLC
John Llewellyn-Lloyd / Harry
Stockdale, +44 (0)20 7456 9191
Execution Noble & Company Ltd
Riaan van Heerden,
PSG Capital (Pty) Ltd +27 (0)21 887 9602
Date: 20/07/2011 16:30:39 Produced by the JSE SENS Department.
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