TORONTO, ONTARIO--(Marketwired - July 8, 2016) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
Transeastern Power Trust ("Transeastern" or the "Trust") (TSX VENTURE:TEP.UN) is pleased to report that, in addition to the previously closed Cdn.$1 million equity financing by way of issuance of units of the Trust at a purchase price of Cdn.$0.70 per unit, it anticipates closing its previously announced transactions on or about July 19, 2016, including: (i) the acquisition of a 17.6 MW operational wind project located in Tulcea County Romania, with the net purchase price being payable as to 50% by way of units of the Trust at a deemed issuance price of Cdn.$0.70 per unit and as to 10% by way of 7.5% convertible unsecured debentures governed by the debenture indenture of the Trust dated May 28, 2014, (ii) the refinancing of EUR17.5 million of project financing facilities secured against the assets of the Trust's existing solar subsidiaries, Corabia Solar S.A. and Power L.I.V.E. ONE S.A., (iii) repayment of the senior secured corporate debt to Sprott Resource Lending and (iv) the new Cdn.$10 million secured debt facility. Final details of the transactions will be announced upon closing.
Mr. J. Colter Eadie, Chief Executive Officer of Transeastern, commented: "These transactions are another transformative step in the rapid growth of our Trust. We have gone from the formation of Transeastern through an IPO to build a platform of infrastructure and management with 40 MW of operating energy assets across wind, solar and hydro. We continue to work towards optimizing our project financing and corporate debt, resulting in a reduction in our cost of capital during the past 25 months. Upon closing the proposed transactions, based on the historical production and existing contracts, we anticipate increasing our EBITDA1 by 2.5x and more than doubling our production with minimal changes to our cost structure. We are pursuing a significant pipeline of accretive transactions with the aim to increase cash flow over the next several quarters and work to grow the trust of and add value for our unitholders."
Each of the transactions remains subject to the satisfaction of applicable conditions precedent and execution of final transaction documents.
The Trust, through its direct and indirect subsidiaries in Canada, the Netherlands and Romania, has been formed to acquire interests in renewable energy assets in Romania, other countries in Europe and abroad that can provide stable cash flow to the Trust and a suitable risk-adjusted return on investment. The Trust seeks to provide investors with long-term, stable distributions, while preserving the capital value of its investment portfolio through investment, principally in a range of operational assets, which generate electricity from renewable energy sources, with a particular focus on solar and hydro power. The Trust intends to qualify as a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). All material information about the Trust may be found under Transeastern's issuer profile at www.sedar.com.
Forward-Looking Statements Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the energy law, expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, high inflation rates, failure to obtain bank financing, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), risks related to seasonality (including adverse weather conditions, shifting weather patterns, and global warming), a shift in energy trends and demands, a shift in energy generation in the European Union, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Details of the risk factors relating to Transeastern and its business are discussed under the heading "Risks and Uncertainties" in Transeastern's annual management discussion and analysis for the year ended December 31, 2015, a copy of which is available on Transeastern's SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Trust. Investors are cautioned not to put undue reliance on forward-looking information. These statements speak only as of the date of this press release. Except as otherwise required by applicable securities statutes or regulation, Transeastern expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise. Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 EBITDA is a non-GAAP measure calculated based on net earnings before interest, taxes, depreciation and amortization.