Agreement with CAMMESA

Rhea-AI Summary

On May 24, 2024, Central Puerto announced an agreement with CAMMESA to settle debts from economic transactions of December 2023, January, and February 2024. According to the agreement, CAMMESA will pay the December 2023 and January 2024 debts via 'Argentine Republic Bonds in US Dollars Step Up 2038' within 10 working days, and the February 2024 debt with available funds within 48 hours. This agreement results in an estimated consolidated loss of 21,200 million pesos for Central Puerto, as the bonds are valued lower than their nominal worth. Despite this, the company assures that its business operations and financial stability remain unaffected.

Positive

• Central Puerto has secured an agreement to receive payments from CAMMESA, providing some liquidity.
• The February 2024 debt will be settled in cash within 48 hours, ensuring quick resolution of part of the debt.

Negative

• The agreement leads to a consolidated loss of approximately 21,200 million pesos due to the lower market value of the bonds.
• The bonds issued for the December 2023 and January 2024 debts are not valued at their nominal worth, reflecting a financial hit.

Insights

Financial Analyst

The agreement between Central Puerto S.A. and CAMMESA primarily impacts the company's financial health. The debts owed by CAMMESA for December 2023 and January 2024 will be paid through public securities, specifically ARGENTINE REPUBLIC BONDS IN US DOLLARS STEP UP 20238, which are currently valued below their nominal worth. This transaction translates into a consolidated loss of approximately 21,200 million pesos for Central Puerto S.A. While the payment structure stabilizes cash flows, the devaluation of bonds negatively affects the company’s balance sheet. The immediate liquidity provided by February's payments in funds is a positive, yet the overall financial health is dampened due to the significant loss. Investors should monitor the potential volatility of these bonds and its impact on the company’s financial statements moving forward.

Market Research Analyst

The decision to accept payment through bonds instead of cash reflects the broader economic challenges in Argentina's energy sector. Bonds maturing in 2038 are subject to market fluctuations and currency risks, making them a less liquid and more volatile asset compared to cash. For retail investors, understanding the risk profile and the potential for market volatility associated with these bonds is critical. This agreement might indicate underlying liquidity issues within CAMMESA, affecting the trust and stability of future transactions. Despite assurances that this won't affect the company's ordinary business operations or payment capacity, the substitution of cash with these long-term bonds could imply future financial maneuvering challenges.

BUENOS AIRES, ARGENTINA / ACCESSWIRE / May 24, 2024 /

Dear Mr./Mrs.,

It is a pleasure to contact you in my capacity as Head of Market Relations of Central Puerto S.A. (the "Company" or "CPSA") in compliance of Section 2, Chapter I, Title XII of CNV Regulations (restated text in 2013 as amended and supplemented) and to inform the investing public that, within the framework of Resolutions 58/2024, 66/2024 and 77/2024 of the Secretariat of Energy issued related with the debts of CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico S.A.) due to the economic transactions for December 2023, January and February 2024, the Company entered into an agreement with CAMMESA (the "Agreement") today whereby they decided that CAMMESA shall pay its debts to the Company as follows:

1. The debts corresponding to the economic transactions for December 2023 and January 2024 shall be paid through public securities "ARGENTINE REPUBLIC BONDS IN US DOLLARS STEP UP 20238" (USD BOND 2038 L.A.) with the term of 10 (ten) working days as from the entering of the agreement; and
2. The debts corresponding to the economic transactions for February 2024 shall be paid with funds available in the bank accounts authorized in CAMMESA with the term of 48 (forty-eight) hours as from the entering of the agreement.

Since Central Costanera S.A. (Company's subsidiary) accepted the Offer by the Secretariat of Energy, and since the bonds receivable have a rate lower than their nominal value, the entering into the Agreement represents a consolidated loss for Central Puerto S.A. (considering the bond quote as of this date) of approximately 21,200 million pesos.

Finally, we state the payment agreements mentioned above do not affect the ordinary course of business of the Company, its payment capacity nor its financing obtaining capacity.

Contact information:

Legal Affairs Manager
Leonardo Marinaro
Tel:(+54 11) 4317 5000

SOURCE: Central Puerto S.A.

View the original press release on accesswire.com

FAQ

What is the impact of Central Puerto's agreement with CAMMESA?

The agreement results in a consolidated loss of approximately 21,200 million pesos due to the lower market value of the bonds received.

How will CAMMESA settle its debts to Central Puerto?

CAMMESA will settle December 2023 and January 2024 debts with 'Argentine Republic Bonds in US Dollars Step Up 2038' within 10 working days and the February 2024 debt with available funds within 48 hours.

Does the agreement with CAMMESA affect Central Puerto's financial stability?

Despite the loss, Central Puerto assures that its ordinary business operations, payment capacity, and ability to obtain financing remain unaffected.

What is the total estimated loss for Central Puerto due to the agreement with CAMMESA?

The estimated loss for Central Puerto is approximately 21,200 million pesos.