Transeastern Power Trust
TSX VENTURE : TEP.UN
TSX VENTURE : TEP.DB

Transeastern Power Trust

September 02, 2014 08:52 ET

Transeastern Power Trust Reports Q2 2014 Results

TORONTO, ONTARIO--(Marketwired - Sept. 2, 2014) - Transeastern Power Trust ("Transeastern") (TSX VENTURE:TEP.UN)(TSX VENTURE:TEP.DB) has released its unaudited financial results for the three months ended June 30, 2014. All amounts in this release are expressed in Canadian dollars unless otherwise indicated.

Q2 2014 Highlights

  • On May 28, 2014, closed its initial public offering of 11,045,800 trust units and $11,763,000 aggregate principal amount of convertible debentures for gross proceeds of $22,808,800
  • Commenced trading of its units and debentures on the TSX Venture Exchange
  • Completed the acquisition of two Romanian hydroelectric power companies, Rott Energy Srl ("Rott") and Zagra Hidro Srl ("Zagra"), and the assets of a third hydroelectric power project ("Suha")
  • Entered into agreements for the purchase of an aggregate of 35,000 MWh of power produced by Transeastern for a minimum purchase price of EUR43.5 per MWh with terms to last for the first 12 to 24 months of operations
  • Entered into agreements for the purchase of an aggregate of 90,000 green certificates produced by Transeastern for a minimum purchase price of EUR44 per green certificate with terms to last for the first 12 to 16 months of operations
  • Net loss for Q2 of $2,585,917 or $0.23 per Unit due to the recently commenced operations and transaction costs related to three project acquisitions.
  • Generated 537.4 MWh of electricity from its Rott project resulting in revenue of $20,375 for one month period after the closing of the initial public offering
  • Declared and paid its initial unit distribution based on an annualized basis of $0.0875 per unit or an 8.75% yield based on a $1.00 initial issuance price

Subsequent Events

  • Commenced the capital improvement plan to increase plant production for Suha and expects to put into function four of its six hydroelectric plants by September 2014 with the remaining two by November 2014
  • Completed the commissioning of two of three Zagra plants and received the building permit to complete construction of the third plant penstock
  • Opened operations and maintenance office in Cluj-Napoca, Romania and hired key operational personnel including new hydro operations manager, chief engineer and chief of dispatch
  • Opened management office in Bucharest, Romania

J. Colter Eadie, Chief Executive Officer of Transeastern commented "During the second quarter we completed our initial public offering with gross proceeds of approximately $22.8 million and listed our units and debentures on the TSX Venture Exchange. We have completed the acquisition of three hydro power plants, are integrating and optimizing them, and are in the process of building out our management platform."

Mr. Eadie concluded "With Transeastern, we have an ideal platform to continue to operate and optimise renewable energy assets globally. We have an excellent initial portfolio of assets and are focused on expanding and diversifying our revenue base while delivering consistent distributions to our unitholders."

About Transeastern

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 hydroelectric 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 "Risk Factors" in Transeastern's final long form prospectus dated March 31, 2014, 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 Company. 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.

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