Echo Energy plc (LON:ECHO), the Latin American focussed energy company, has provided an update on the Argentine value added tax reclaim process, and the successful monetisation of a further proportion of the Argentine VAT owed to the Company.
Disbursements totalling Ars$ 48.4 million (approximately US$ 0.5 million), consisting of Ars$ 33.1 million plus interest of Ars$ 15.3 million of PP&E VAT owed to Eco Energy TA Op Limited (the “Subsidiary”), the Company’s subsidiary which holds a 25% interest in the Santa Cruz Sur assets (of Echo’s total 70% interest), have now been received. This cash payment demonstrates the continuing successful processing of VAT refunds owed to the Company by the Argentine authority, AFIP, as it resumes normal activity following months of COVID – 19 related shut down.
Following these most recent disbursements, historical reclaims regarding VAT owed to the Echo group related to operations at Santa Cruz Sur totalling approximately US$0.7 million remain in progress.
The Company is also pleased to announce that the 2020 PP&E VAT claim of Ars$ 54.8 million (approximately US$ 0.6 million) for Eco Energy TA Op Limited has been accepted by the Argentine VAT office. The Company’s subsidiary, Eco Energy CDL Op Ltd, which holds Echo’s remaining 45% interest in Santa Cruz Sur, has also had its 2020 PP&E VAT claim of Ars$ 8.1 million approved. Further processing of these claims will now take place ahead of future expected reimbursement.
The Argentine VAT office has also separately now approved the Free VAT application Eco Energy CDL Op Ltd of Ars$ 9.5 million and Echo have completed a sale of this VAT credit in exchange for cash.
The unlocking of the Argentine VAT refund process is, and is expected to continue, to provide material cash funds in the coming months and provides further evidence of the normalisation of in country activities following delays in 2020 caused by COVID 19 restrictions.