Power generation firm Independent Power South Africa (Ipsa) Group has obtained a £4.2-million short-term loan from private investment company Bluestone Securities to repay the loan from Standard Bank, originally due for payment in September 2009.
Ipsa said the new funding arrangement would allow it more time to sell its two remaining W701 DU gas turbines. Negotiations to sell the turbines were ongoing and would not require Bluestone’s consent, provided certain minimum values were achieved.
The loan was due for repayment in 90 days, unless extended by mutual agreement or earlier, besides others, upon sale of the turbines.
The interest rate on the loan was 1% a month, payable on the repayment date. A success fee of $2-million would be payable on redemption of the loan following receipt of the proceeds from the sale of the turbines.
Ipsa confirmed that its working capital position remained constricted and that, without the continued support of all its creditors, additional working capital would be required to settle with all its creditors prior to completion of the sale of the remaining two turbines.