This follows the approval of the procedure for the calculation of the new tariffs, which was announced on August 12, 2009. The new electricity tariffs will result in an average increase of between 0% and 15% for residential users and between 12% and 22% for commercial users, representing an average total increase of approximately 12%, which will be effective retrospectively from August 1, 2009.
As announced on February 21, 2008, the terms for the acquisition of the final 50% indirect interest in Sodem included the possibility of an earn-out payment. The approval of the procedure for the calculation of the new tariffs might crystallize this earn-out payment, which may be satisfied in cash and/or through the issue of new company shares.
Under the terms of the stock purchase agreement, certain elements of the earn-out are still open to interpretation and are being agreed with the seller. A further announcement will be made once the timing and the amount of the earn-out payment, if any is due, have been established.
Neil Bleasdale, chairman of Andes, said: “We are pleased that the Government has approved this tariff increase and we hope that further tariff adjustments already established for the third tariff review period will also become effective. This will allow us to continue to satisfy our debt, working capital and investment obligations.”
