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IPS
IPSA
IPS/IPSA - IPSA Group Plc - Agreement to acquire Turbines
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration number 5496202)
AIM Share Code: IPSA & ISIN: GB00B0CJ3F01
JSE Share Code: IPS & ISIN: GB00B0CJ3F01
(`IPSA` or `the Company`)
The Board of IPSA, the independent power plant developer with operations in
southern Africa, is pleased to announce that, following the placing
completed on 8 March 2007, it has today entered into an agreement to
acquire from a subsidiary of Siemens AG four Fiat Avio gas turbines ("the
Turbines") with an aggregate generating capacity of around 500 MW.
It is intended that the Turbines will be installed as part of the first
phase of generating capacity to be installed for the Coega Fast Track
Project ("Coega") just outside Port Elizabeth in South Africa.
Coega, IPSA`s largest development project to date, is proposed as a
combined cycle gas turbine ("CCGT") project of 1,600 MW made up of two
separate blocks of 800 MW each. The Turbines being acquired will form the
open cycle components of the initial 500 MW of the first block. Conversion
of the two blocks to combined cycle is expected to take place at a later
stage. The Coega project remains subject to the receipt of the necessary
Government regulatory approvals, planning and environmental consents being
granted and to financing being completed.
The Company has agreed to pay a total of Euro31.2 million (approximately
US$40 million) for the Turbines, which equates to c. US$80 per KW. Payment
of the consideration is scheduled in three tranches: the first tranche of
25 per cent. is payable immediately upon entering into the agreement; the
second tranche of 25 per cent. will be payable on 31 March 2007; and the
third tranche of 50 per cent. will be payable on 31 March 2008.
The initial two financing payments totalling approximately US $20 million
are being met out of the existing cash reserves and short term financing
available to the Company. The Directors are confident that longer term
financing for the Turbines will be forthcoming for the Company, although
the precise nature of that funding will be decided in due course.
Peter Earl, CEO of the Company, said:
`We are very pleased to be able to acquire these turbines at an equivalent
price of just US$80,000 per MW. This allows our Coega Fast Track Project to
be highly competitive in terms of the installed cost per MW, which is the
key ratio for every power developer. By purchasing turbines ready for
immediate delivery, we can considerably reduce the time it takes to have
the first unit up and running. This is absolutely vital to South Africa at
a time when there are severe power cuts affecting the whole country - but
especially the Cape region. The acquisition of the first 500 MW of
turbines for Coega not only reduces the time pressure on the construction
timetable but also positively improves the economic factors influencing the
returns on the project.`
Sponsor
Standard Bank
AIM nominated advisor
Noble & Company Limited
For further information please contact:
Peter Earl, CEO, IPSA Group plc 020 7793 7676
John Llewellyn-Lloyd, Noble & Company Limited 020 7763 2200
Date: 09/03/2007 13:29:55 Produced by the JSE SENS Department.
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