Hard Felguera has signed a memorandum of understanding with Sonelgaz Production d’Electricité (SPE) for the friendly resolution of the DJELFA project in Algeriawhich means unlocking the contract signed in February 2014 and was suspended last June, as reported on Wednesday the Asturian engineering company to the National Securities Market Commission (CNMV). Specifically, the Algerian Energy Company presented to the Chamber of Commerce and Industry of Algeria an arbitration request against Duro Felguera for the suspension of the Djelfa Agreement, consisting of the construction of a combined cycle center.
In addition, the memorandum of understanding signed between Duro Felguera and Sonelgaz includes the assignment of the power plant of Djelffa in Algeria to a group of companies led by the Chinese company Power Engineering & Consulting Group International Engineering and the “definitive and friendly resolution of all existing controversies and litigation between Duro Felguera and SPE.
The Felguera Hardly Agreement
Likewise, the agreement has been signed by China Power Engineering in its condition as assignee of the contract, and by the Gener Energy France SNC company in its condition as the manufacturer of the teams.
On the one hand, the objective of the Memorandum of Understanding is to guarantee the completion of the construction of the DJELFA power plant, commissioned to the Asturian company in 2014, by assigning the contract by Duro Felguera to China Power Engineering.
On the other hand, the agreement goes through “the conventional termination of all existing claims and litigation between Duro Felguera and Sonelgaz, with withdrawal for the parts of the current arbitrations,” explained Spanish engineering.
The concretion of the definitive terms of the agreement between all parties and the effective execution of the assignment of the contract, the resolution of reciprocal claims between Hard Felgeura and Sonelgaz, as well as the termination of the arbitrations existing between them, must be carried out within one month from the signature of the Memorandum of Understanding.
Arbitration in Algeria
In the request for arbitration against Duro Felguera, the Algerian client asked to lift the suspension of the contract, blocked since last June, and resume the work, as well as compensation of some 413 million euros.
This was the detonating that he led Felguera to request the preconception of creditors on December 11 before the courts of the commercial of Gijón, since the Algerian arbitration led to that the Asturian had to re -express its financial results since 2022, after provisioning 100 million euros in its accounts for the Djelfa project.
DJELFA project in Algeria
Since 2014, Duro Felguera was carrying out the Djelfa project, which has been submitted to continuous delays linked to different issues ”, thus deriving in the existence of several claims by the Asturian to Sonelgaz, as a result of the breach of its obligations.
«After signing a protocol according to late 2021 and of a modification (AVANANT) To the April 2022 contract, in which the Algerian client was forced to release part of the retention practiced on the billing of Hard Felguera and to analyze the claims of the same, the works were reactivated, ”explained the Spanish company after the reprisal of its 2023 accounts.
After several situations on site that made it impossible, totally or partially, the progress of the works and that accumulated to the previous breaches, on June 18 Duro Felguera informed Sonelgaz the suspension of the contract as long as the referred breaches by the client will not be remedied.
For his part, Sonelgaz opposed the suspension, other rights were reserved and a negotiation period began, which led Hard Felguera to have to perform a new accounting treatment of the Algerian project.
