The company reported net losses for the year down to US$5.1M from US$8.6M last time on revenues up to US$25.4M from US$5M. Operating losses were cut to less than US$0.4M from US$9.2M.
Just over three-quarters of revenues last year came from the firm’s power activities – the prime contribution coming from its purchase of a stake in the Corani hydropower plant, in Bolivia, last year. The consolidated cash position at 31 December 2007 was US$37M.
The company has been exploring strategic options in the weakening credit environment to improve shareholder value, and concluded the best route forward is for a sale or merger. The announcement last month followed a preliminary approach by Trading Emissions, which was rejected as undervaluing the business.
Econergy said in its 2007 results statement: ‘A number of approaches have been received, but there can be no certainty that a firm offer will be made for the company.’
However, the announcement has ‘adversely affected certain funding projects at group and project level’, it said. Econergy added that without access to further funding it did not have enough working capital to meet all its project commitments in the short- to medium-term.
‘The board continues to seek this additional financing and is in discussions with a number of potential finance providers,’ it added.
Econergy has agreed to a part-sale of its holding in the 19.8MW Areia Branca hydro project, in Brazil, which is under construction and is due to be commissioned late this year, in mid-November – but about a month a half later that scheduled. Difficult geological conditions beset construction work, Econergy said.
It will continue to have a majority stake following completion of the deal to sell 27 percentage points of its 80% controlling interest in Areia Branca to Dutch firm Financierings-Maatschappij voor Ontwikkelingslanden (FMO). The agreed sale price is US$4.8M, and Econergy hopes by next month to have necessary approvals for the transaction to close.
The company bought a 50% stake in the 147MW Corani plant from Duke Energy Corp in February 2007. The price was US$20M versus the project’s installed cost of approximately US$243M. The 40-year old plant’s output meets about 20% of the country’s power needs, it said.
Since the acquisition, Econergy has received US$8M in dividends from its stake in the plant’s holding company, Empresa Electrica Corani. Last year, Corani generated 783GWh of electricity, almost 5% over target, and revenues were US$23M. The plant had a 98% availability factor.
