Small Talk: Rurelec focuses on 'fair value' after nationalisation

Political risk is usually the part of an analyst's report that most investors ignore – after all, anyone parting with their money hardly needs to be told that investing in a company that operates in some of the dodgier parts of the world is dangerous, and especially not by someone who rarely leaves the comfortable confines of the Square Mile.

Nonetheless, those that skipped that section in the notes on Rurelec, which is listed on the Alternative Investment Market (Aim), may well now be kicking themselves. The Latin American-based power plant developer and operator lost 46.6 per cent of its value last week after Bolivia nationalised Empresa Guaracachi, a company in which Rurelec had a majority stake, transferring the assets to the state-owned ENDE.

It is not all bad news, however. Under the so-called Supreme Decree, legislation passed by President Evo Morales's government in La Paz, and agreements between the Bolivian and UK governments, Mr Morales will pay fair value for the assets, giving Rurelec about £70m in cash, according to sources close to the company. The sum more than doubles the group's market capitalisation.

"Our main focus now in Bolivia is to obtain 'fair value' for our assets as protected by the United Kingdom-Bolivia Treaty," said Peter Earl, Rurelec's managing director. "However, Rurelec is not just about Bolivia. I would like to reassure our investors that our other operations in Argentina are performing well and we are due to complete a refinancing issue of bonds in Argentina, as previously announced, now that we have obtained our key approvals from the government of Argentina for premium electricity tariffs.

"Bolivia's surprise nationalisation move was taken in the face of assurances given to the British and French ambassadors in La Paz at the end of last week that the Morales administration continued to want to maintain European private investment in the power sector. Sadly, this was not the case."



Regional SMEs begin to signal end to recession

While it may be too late for Labour (or maybe not), which built its election campaign largely on its economic competence, research suggests that the small-cap sector is roaring back to health. A survey by Insurantz.com found that small companies were largely putting the recession behind them. Just under a quarter of small retailers and manufacturers said they had reasons to be cheerful, and many said 2010 had been "better than last year".

Small caps in the North-west and South-west of England are top of the table when it comes to making a regional post-recession recovery. One in five businesses in those regions is celebrating a good start to 2010, although SMEs in the South are continuing to struggle. Fourteen per cent of southern businesses have endured a poor year so far, the poll shows.

"As the vast majority of Britain's 4.8 million businesses are classified as SMEs, it appears that the businesses that are the driving force of the economy are seeing UK plc on the slow road to recovery," said James Pickering, the company's managing director. "Just under half of our respondents said that they were seeing 'green shoots' and that is good news for us all."

Of course, it is still early days, and with the prospect of public sector cuts on the way, the economy is likely to be hit by a train later this year, which could very easily dampen the optimism expressed in Insurantz.com's research.

Ilika upbeat about unmet demand ahead of IPO

"A successful technology IPO", trumpeted the representatives of Ilika, a clean technology company. Well, steady on, that's rather jumping the gun, we think, especially since the shares do not even start trading on AIM until Friday. If the shares tank, it will be anything but successful.

Nonetheless, the company last week said that it had published its admission document to raise £5.2m, placing the shares at 51p each. The deal will give the group a market capitalisation of £18.7m. Getting the deal away was no mean feat, especially with the problems in Greece sending worldwide equity haywire, but we will see if the group, and its nomad Numis, have priced the deal properly.

"By using the materials we invent, our multinational partners can scale up and commercialise their next generation of products much more quickly," said Graeme Purdy, Ilika's chief executive.

"The new funds will enable us to accelerate further the development of materials in our chosen markets. There is unmet demand for ways of solving the problems of over-reliance on traditional forms of energy and resource, which we have the technology and business model to exploit. We think this is a highly attractive proposition and we are delighted that our new investors agree."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
Time to lay these myths about the Deep South to rest

Time to lay these myths about the Deep South to rest

'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

What exactly does 'one' mean?

Court of Appeal passes judgement on thorny mathematical issue