Impsa seeks government aid after late payments issue

ARGENTINA: Argentinean engineering firm Industrias Metalurgicas Pescarmona SAIC (Impsa) has sought government aid as it faces a severe cash-flow problem after a number of clients failed to pay on time, local media are reporting.

Chairman Enrique Pescarmona has reportedly held talks this week in Buenos Aires with Argentina's economy minister, Axel Kicillof, and industry minister Débora Giorgi.

After producing its first wind turbines in 2003, Impsa has become of Argentina's two largest producers of wind turbines together with NRG Patagonia.

Last December, together with Brazilian sister company Wind Power Energia, the company won the largest contract in its 80-year history to produce 287 IWP-111 2MW turbines, worth approximately BRL 1.65 billion ($714 million) for delivery between 2016 and 2018, plus a five year operating and maintenance contract.

But its finances were hit after Venezuela's state power firm Corpoelec delayed payment for ten hydraulic turbines supplied to the 2.16GW Manuel Piar hydroelectric plant in Bolivar state. Late last year the two companies recalculated the bill to $1.155 billion, more than double the original $479 million agreed in 2008.

In a statement to the Buenos Aires Stock Exchange dated 10 September, general counsel Hernan Iglesias said Impsa had hired financial advisers "to undertake an assessment of its current commercial, operational and financial situation", including problems relating the late payments by some clients on a number of major contracts.

Iglesias wrote: "Impsa, together with its advisers, is developing a plan to tackle this situation."

Meanwhile, Iglesias said that WPE, which is owned by Impsa's Luxemburg-registered parent company, Venti, is looking for international partners or to sell a number of wind farms. Last month, the firm narrowly avoided bankruptcy proceedings. "As a result, WPE may, from time to time, hold preliminary negotiations in this direction with potential candidates," Iglesias added.

A 2006 law requires Argentina to derive 8% of its electricity from renewable sources by 2016, creating a market of 500MW for wind farm projects.