UK’s Rurelec regrets Bolivia nationalisation

LONDON, May 1 (BestGrowthStock) – Rurelec (RUR.L: ), which owns a 50
percent controlling stake in Bolivian power company Guaracachi,
said it was “very disappointed” after the firm was nationalised
by the country’s leftist President Evo Morales.

“We’re very disappointed. We’re disappointed because Rurelec
is third largest British investor in Bolivia. And since 2006,
when Evo became president, we have invested more than $110
million in new power plant capacity,” Rurelec chief executive
Peter Earl told Reuters.

He said that investment had contributed to Bolivia’s GDP
growth by stopping power cuts.

“So it seems unfortunate to reward a company that invested
to mean that GDP growth can continue by nationalising its
controling stake in Bolivia’s largest power company,” he added.

He said the book value of Rurelec’s stake was $65 million,
with another $5.5 million in dividends declared by its Bolivian
subsidiary but not yet paid. Rurelec’s Bolivian operations
contribute some 454 megawatts of power.

“The replacement costs of 454 meggawatts is a million
dollars a megawatt, so if this goes to an international
arbitration we would be looking to get compensation considerably
more than the 70 odd million dollars of book value,” Earl said.

Rurelec would wait until it sees the supreme decree for the
nationalisation before it decides its next move, he said.

Earlier on Saturday leftist Bolivian President Evo Morales
said he had nationalized four power companies, including a
subsidiary of France’s GDF Suez, in his drive to tighten state
control over the impoverished economy. [ID:nN01186218]

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(Reporting by Mohammed Abbas: Editing by Keiron Henderson)

UK’s Rurelec regrets Bolivia nationalisation