Tonbridge Power Inc.

Tonbridge Power Inc.

October 09, 2007 09:00 ET

Tonbridge Power Concludes US$31 Million Financing

TORONTO, ONTARIO--(Marketwire - Oct. 9, 2007) - Tonbridge Power Inc. (TSX VENTURE:TBZ) ("Tonbridge Power" or the "Company"), 100% controlling shareholder of Montana Alberta Tie Ltd. ("MATL"), a company developing a transmission line project to interconnect the electricity markets of Alberta and the United States through a 300 MW transmission line between Lethbridge, Alberta and Great Falls, Montana (the "MATL Project"), is pleased to announce the completion, on Friday October 5, 2007, of a US$31 million debt facility with Anchorage Capital Master Offshore III, Ltd., a Caymans exempted liability company. The facility positions the Company to execute its business plan through to the construction phase of the MATL Project and to complete the arrangement of senior project financing.

Morgan Stanley & Co. acted as sole arranger in connection with the facility. Under the terms of the facility, the first tranche in the amount of US$18 million of gross proceeds was advanced on closing Friday and will be used to complete the development phase of the MATL Project and for general corporate purposes. The second tranche of the facility in the amount of US$13 million of gross proceeds will be advanced when the remaining permits for the MATL Project have been obtained and will be used to repay MATL's existing development loan facility. Both tranches of the facility bear interest at the rate of 13.25% per annum, with an option in favor of the Company to accrue and add the amount of the interest payments to the principal amount of the loans at an additional cost of 75 basis points. This affords the Company greater flexibility to arrange senior project financing and manage cash flows effectively. Both tranches of the facility are for a term of five years from the date of advance, subject to certain prepayment provisions and are intended as semi permanent capital through to operations.

In conjunction with the financing, the Company has issued 30,000,000 common shares to Anchorage Capital Master Offshore III, Ltd., together with non-transferable special warrants to acquire an additional 20,000,000 common shares at no additional cost upon the advance of the second tranche of the facility. The special warrants are for a period of 24 months and are exercisable only upon the advance of the second tranche. The common shares issued on closing and those issuable on exercise of the special warrants are subject to a four-month hold period ending on February 5, 2008.

It is not intended that the facility will be replaced when senior project financing is arranged in early in 2008. The facility is secured and currently ranks junior to the existing facility and is intended to rank junior to senior project financing.

Morgan Stanley & Co. earned a fee of 4% of the principal amount of the facility in connection with its role as sole arranger.

Tonbridge Corporation, advisor to the Company since the Company assumed control of the MATL Project in 2005, earned a fee of $500,000 on closing of the facility, including deferred fees earned but unpaid since completion of the Nordbank facility in December 2006. In addition, Tonbridge Corporation has been granted non-transferable share purchase warrants to acquire up to 2,941,176 common shares at an exercise price of $0.17 per share for a period of 24 months. Of these purchase warrants, warrants to acquire up to 758,306 common shares are not exercisable until the advance of the second tranche of the facility. The common shares issuable on exercise of the purchase warrants are subject to a four-month hold period ending on February 5, 2008.

Johan van't Hof remarked: "We are very pleased to have concluded this arrangement prior to the commencement of the Alberta Energy Utilities Board hearings scheduled for MATL later this month. The capital provided by this facility ensures that we have the financial capacity to move forward with the project on a basis that meets the needs of users, landowners and shareholders."

Tonbridge Power Inc. is a Toronto-based developer of electrical transmission assets, whose principle asset is a 100% interest in Montana Alberta Tie Ltd. Shares of the Company are traded on the TSX Venture Exchange under the symbol "TBZ".

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Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information", within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking information includes, but is not limited to, information with respect to future financings, governmental and regulatory approvals and permits, and the development of the MATL Project. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "should", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: delays in obtaining governmental approvals and permits; risks related to the financing or construction of the transmission line; delays in the completion of development or construction activities; requirements for additional capital; risks associated with government regulation; environmental risks; risks related to the performance of parties contracting for transmission capacity; the conditionality of the revenue contracts; all all those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2006, available on Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information that is incorporated by reference herein, except in accordance with applicable securities laws.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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