In a statement, Econergy said that the settlement with Hydro Partners was conditional on the 20MW Pipoca project, in Brazil, being acquired by a third party. Hydro Partners has told Econergy that it is in advanced talks towards achieving that goal.
Separately, Econergy’s directors are backing the all-cash offer of US$77.7M for the independent power company that was made last month by Suez Energy South America.
Econergy had previously signalled it was looking for a buyer or merger but rejected an approach from Trading Emission as being too low. The Suez bid is a premium of 43.1% over the previous takeover offer.
In addition, Suez is making loan facilities of more than US$50M available to Econergy, subject to its offer being accepted by more than half of shareholders.
The offer was not contested by Trading Emissions and has since attracted almost 51% support from shareholders.
A few months ago Econergy posted higher revenues and reduced losses for 2007 and repeated its desire for a sale or merger. It added that the announcement of the strategic move had resulted in funding challenges.
Just over 75% of the company’s revenues in 2007 came from its power activities, principally its stake in the 147MW Corani hydropower plant in Bolivia.
In rationalising its financial way forward while having project under development, one of the decisions Econergy made was to part-sell its holding in the 19.8MW Areia Branca plant being built in Brazil.
