Reservoir Capital Corp.
TSX VENTURE : REO
FRANKFURT : ROC
BERLIN : ROC

Reservoir Capital Corp.

March 24, 2010 07:30 ET

Reservoir Agrees to Acquire Hydro Projects in Turkey

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 24, 2010) - Reservoir Capital Corp. ("Reservoir" or the "Company")  (TSX VENTURE:REO)(FRANKFURT:ROC)(BERLIN:ROC) is pleased to announce that it has signed a Memorandum of Understanding ("the Agreement") with Ahmet Caliskan and Burcin Tunca ("the Current Shareholders") to acquire a 75% interest in a 30.4 megawatt ("MW") portfolio of six small-scale hydroelectric projects in western and northwestern Turkey. Construction of the first projects is scheduled to begin in the second half of 2010, with the first one coming on-line in early 2011 and the remainder in stages before the end of 2012. Electricity production is projected to be approximately 100 gigawatt hours ("GWh") per annum.

Under the terms of the Agreement, Reservoir will acquire a 25% interest in the portfolio by providing equity contributions of US$1.5 million payable by the end of March 2010, US$2.5 million payable by the end of May 2010 and US$2.0 million payable by the end of January 2011. Debt financing for the projects is anticipated to be arranged through Turkish banks, with the current Shareholders of the portfolio providing the remaining equity funding. Reservoir will acquire an additional 50% interest in the portfolio (for a total of 75%) for US$17 million, which will be paid in stages as the projects are completed and fully operational.

"This acquisition is attractively priced at approximately US$1.0 million per megawatt, with most of the payments only due upon completion of the projects," commented Miles Thompson, Chairman of Reservoir. "It provides the Company with near-term operating assets and cash-flow over the next two years while we advance the Brodarevo projects in Serbia through to production."

The project portfolio also includes an application for a seventh license (approximately 6 MW) that will be included in this transaction if granted. The Company expects to work with the current Shareholders to acquire additional pipeline projects in the coming months.

Reservoir has been advised in this transaction by Epic Financial Consulting Gesellschaft mbH (Austria) and has appointed Balcioglu & Selcuk (Turkey) to complete legal due-diligence. The local offices of Tractebel Engineering (Belgium) and Coyne et Bellier (France) have been engaged for the technical due diligence.

About Reservoir

Reservoir is a renewable energy company, engaged in the development of a 55MW hydroelectric project at Brodarevo in southwest Serbia. The Company has applied for a 32MW license at Vrutci, holds four geothermal exploration licenses and is studying various other hydroelectric and geothermal opportunities in the region. Reservoir also holds a substantial portfolio of precious and base metal exploration projects, which it is looking to divest. Reservoir's common shares trade on the TSX Venture Exchange (symbol "REO") and on the Frankfurt and Berlin Exchanges (symbol "ROC").

For further information on Reservoir Capital Corp. please consult the Company's website www.reservoircapital.ca.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Reservoir Capital Corp.
    Miljana Vidovic
    President
    +1 (604) 662-8448
    or
    Reservoir Capital Corp.
    Miles Thompson
    Chairman
    +1 (604) 662-8448
    or
    Reservoir Capital Corp.
    Kim Casswell
    Corporate Secretary
    +1 (604) 662-8448
    or
    Reservoir Capital Corp.
    Julia Maxwell
    Investor Relations - Vancouver
    +1 (604) 662-8448
    +1 (604) 688-1157 (FAX)
    info@reservoircapitalcorp.com
    www.reservoircapitalcorp.com
    or
    Reservoir Capital Corp.
    Chris MacIntyre
    Investor Relations - Toronto
    +1 (416) 346-7660