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Argentine consortium acts on debt

Hidroelectrica Piedra del Aquila (HPDA), has reached agreement in principle with private banks and with the state-owned Banco Nacion, to restructure its debt of about US$423M.

The HPDA consortium — comprising Chile’s Chilgener, Canadian utility Transalta, and US multi-national Duke Energy — own 61% of Piedra del Aguila, a 1400MW hydro dam and power plant on the Lemay river in southern Argentina. The remainder of the plant is owned by the Argentine government.

Faced with cash flow problems and having defaulted twice this year, the hydro plant operator proposed a three-pronged proposal to swap its unpaid bonds to private banks and reschedule some of its debt to be paid in two installments.

The restructuring aims to obtain more capital from shareholders and minimise the chances of default, which might lose the consortium its concession to operate the hydro plant.

HPDA said that its income had been affected by drought, lower than expected power prices, weakness in the Latin financial markets, and recent Argentine tax reforms. Its profit had dropped from US$70M to US$47M.