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Trading Update
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
Trading Update
New Generation Capacity for Newcastle
Arbitration with Turbocare
IPSA Group PLC (AIM: IPSA), the developer, owner and
operator of power generation capacity in southern Africa,
is pleased to announce that NewCogen, the Company’s
wholly owned generation subsidiary, has acquired a Deutz
gas fired engine of 1.3 MW which is due to be installed
at the Newcastle site by the end of October and which
will operate under the existing MTPPP contract with
ESKOM. This is the first new capacity at Newcastle since
the original plant was commissioned in 2007.
Furthermore, NewCogen is in advanced discussions for
installing up to 8MW of gas engines through a co-
operation agreement with a third party willing to bring
its own funding for the expansion. Through these and
other programmes in development, NewCogen and IPSA will
be well positioned to respond positively to the recently
issued Request for Registration and Interest issued by
the Department of Energy to which IPSA responded on the
12 July 2013, with new capacity capable of being
installed within the next 18 months.
IPSA is also pleased to announce that, following the
receipt of the agreed GBP1,000,000 from Sterling Trust in
relation to the vendor placing of Rurelec PLC shares
issued as part of sale of the turbines announced on 10
June 2013, the Company has been able to meet its
immediate obligations to non-salary creditors, with the
exception only of Turbocare S.p.A ("Turbocare") with whom
IPSA is in dispute in relation to a sum of approximately
€4.9 million which Turbocare claims it is owed under the
Turbine Refurbishment Agreement (“the Agreement”).
Under the Agreement, in the event that Turbocare has not
been paid the sum which it is claiming by 15 September
2013, the matter will proceed to settlement by
arbitration under the London Court of International
Arbitration (“LCIA”). The directors of IPSA believe a
substantially lower sum is owed. Accordingly, Turbocare
has filed a request to commence arbitration under the
LCIA process and IPSA has accepted this request. The
directors believe that the LCIA process will take many
months to conclude.
The Directors of IPSA would draw shareholders’ attention
to the fact that the full amount claimed by Turbocare has
already been recognised as a creditor balance in the
Company’s accounts even though IPSA’s position remains
that the sums billed by Turbocare are incorrect. IPSA
has made an offer to Turbocare to settle prior to
arbitration commencing and still hopes to achieve
settlement between the parties outside of the arbitration
process.
Until the sale of the final two turbines is completed and
final sums received from Rurelec PLC, the Company’s
working capital position will remain tight, although
approximately GBP1.2m of outstanding salary creditors are
not due for payment until the earlier of the date that
IPSA has sufficient funds or 31 May 2014, as previously
announced. The majority of the Company’s assets are held
in the form of the operating plant at NewCogen, together
with surplus turbine equipment held by Turbocare which
the Company is considering selling in order to raise
funds.
For further information contact:
Phil Metcalf, CEO +44 (0)20 7793 5615
IPSA Group PLC
John Llewellyn-Lloyd / Harry +44 (0)20 7456 9191
Stockdale
Execution Noble & Company Ltd
Harry Ansell / James Joyce +44 (0)20 7220 1666
W H Ireland Ltd
Riaan van Heerden, +27 (0)21 887 9602
PSG Capital (Pty) Ltd
London
2 August 2013
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