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SARAJEVO (Reuters) - Canada's Reservoir Capital Corp (REO.V), developer of several renewable energy projects in the Balkans, said it would have to raise additional equity to complete the work due to red tape it faces in Serbia.
The company is developing the 60 megawatt (MW) Brodarevo hydro power plant on the Lim river and the up to 20 MW Vranjska Banja geothermal project in Serbia, as well as three 18 MW hydro power plants in neighboring Bosnia.
"The longer-than-expected timelines for approvals in Serbia and uncertainties around the bilateral agreement on renewable energy exports between Serbia and Italy have meant that the company has been unable to advance its negotiations for project finance in a timely fashion," it said in a statement.
It did not say how much new equity it needed to raise and did not say at what price any new stock would be issued.
The company, which is also exploring a number of other renewable projects in southeast Europe, had earlier signed a 20-year power sale deal from its planned Brodarevo plant with GDF Suez Energia Italia (GSEI), a unit of GDF Suez GSZ.PA, through which it will deliver power to Italy.
Reservoir also said it planned a share consolidation following a drop in its share price to levels substantially below those at which it is viable to issue new shares.
It said it would ask shareholders to approve the one-for-20 consolidation at a March 4 meeting.
Its shares were trading at C$0.015, well below a peak of C$1.77 seen in 2011.
Reporting by Maja Zuvela; Editing by Michael Kahn and David Holmes