Maxim Power Corp.
TSX : MXG

Maxim Power Corp.

October 28, 2005 16:00 ET

MAXIM Power Corp. Announces Intention to Complete a Private Placement for up to $35 Million and Revision to Operational and Financial Outlook

CALGARY, ALBERTA--(CCNMatthews - Oct. 28, 2005) -

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States.

Maxim Power Corp. (TSX:MXG) ("MAXIM") is pleased to announce that it is proceeding with a private placement of up to $35 million (the "Offering") via a non-brokered private placement of common shares of the Company (the "Shares") at a price of $0.63 per share or the 10 day weighted average trading price.

It is expected that the Shares will be sold to insiders, certain related parties and other accredited investors in the Provinces of Ontario, Alberta, and British Columbia and such other jurisdictions as the Company may agree. Completion of the Offering is subject to receipt by the Company of all necessary regulatory approvals. The securities to be issued under the Offering will be subject to a four-month hold period under applicable securities legislation.

The net proceeds of the Offering may be used to repay certain bridge loan facilities, a portion of which certain insiders provided, and for working capital purposes. The proceeds of the bridge loan facilities were used to finance the 52 megawatt ("MW") Basin Creek Project in Montana ("Basin Creek") and the acquisition of three power companies in France having 54 MW of electric and 18 MW of thermal net generating capacity.

Basin Creek is under construction with $35.1 million spent (or 75% complete) to September 30, 2005. This project, which will represent a net 50.2 MW of natural gas fired generating capacity to MAXIM, is expected to be in commercial operations by January, 2006, at which time, it will sell power under a fixed price contract.

MAXIM has completed construction of the 5.6 MW Bataneres Cogeneration facility ("Bataneres") in France. Commercial operation of Bataneres will begin on November 1, 2005, the start of the French cogeneration season. With the completion of the Bataneres power plant, and the acquisition of seven power plants in 2005, MAXIM now has 10 power plants in France having a total net generating capacity of 63 MW electric and 27 MW thermal.

Outlook

As of August 12, 2005, MAXIM had projected electricity deliveries of between 576,000 - 651,000 MWh for the second half of 2005. This reflected a planned plant turnaround for Milner of three weeks. During this scheduled outage, it became apparent that further repairs were necessary and desirable, and an additional two weeks were required to complete the turnaround, primarily due to delays in equipment delivery and related testing. Consequently, electricity deliveries in Q3 2005 were lower than originally forecast. However, Revenue and EBITDA estimates for the balance of 2005 now reflect higher power prices currently being experienced and projected over the balance of the year for Alberta. As a result, MAXIM's financial outlook for 2005 has improved and is currently as follows:




Recorded Outlook at August 12, 2005
------------------------------------------------
6 Months
Ended 6 Months 12 Months
June 30, Ended Ended
($ in Thousands) 2005 Dec. 31, 2005 Dec. 31, 2005
------------------------------------------------------------------------
Electricity
Deliveries (MWh) 499,008 576,000-651,000 1,075,000-1,150,000
Revenue $29,290 $46,500-51,000 $75,500-80,000
EBITDA $ 6,652 $ 9,900-11,900 $16,500-18,500

Revised Outlook at October 28, 2005
------------------------------------------------
6 Months 12 Months
Ended Ended
($ in Thousands) Dec. 31, 2005 Dec. 31, 2005
------------------------------------------------------------------------
Electricity
Deliveries (MWh) 495,000-555,000 994,000-1,054,000
Revenue $49,500-53,500 $78,800-82,800
EBITDA $13,300-14,300 $20,000-21,000


With higher power prices in Alberta, MAXIM is evaluating several power sales opportunities which may result in short-term Power Purchase Agreements ("PPAs") with respect to its Milner power plant ("Milner"). Milner is a 144 MW coal-fired power plant located near the town of Grande Cache, Alberta. Any PPAs would be structured to sell physical power on a "fully unit contingent basis" which would mean that MAXIM would have the obligation to deliver power if, and only if, Milner is running.

MAXIM expects to have a total of 385 MW electric and 45 MW of thermal net installed generating capacity in operation by the end of 2005. This would represent an 85% increase in installed electric capacity from year end 2004. MAXIM will continue to execute on its strategy as an Independent Power Producer and is targeting significant growth through acquisitions, development and rationalization of power projects which utilize hydrocarbon based fuels and renewables in the markets of North America and Europe.

About MAXIM

Based in Calgary, Alberta, MAXIM is an Independent Power Producer, which acquires or develops, owns and operates innovative and environmentally responsible power projects. MAXIM currently owns and operates 24 power plants in Western Canada, Continental Europe and Cambodia, having 268 MW of electric and 45 MW of thermal net generating capacity with another 52 MW under construction. MAXIM trades on the TSX under the symbol "MXG". For more information about MAXIM, visit our website at www.maximpowercorp.com.

Statements in this release which describe MAXIM's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of MAXIM to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. MAXIM may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities of MAXIM have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the press release.

Contact Information

  • Maxim Power Corp.
    John R. Bobenic
    President and CEO
    (403) 750-9300
    or
    Maxim Power Corp.
    Victor S. Dusik
    Vice President, Finance and CFO
    (403) 750-9319