Universal Energy Group Ltd.

Universal Energy Group Ltd.

April 16, 2009 10:14 ET

Universal Energy Group Subsidiary Receives Equity Investment and Settles Lien Claim

TORONTO, ONTARIO--(Marketwire - April 16, 2009) - Universal Energy Group Ltd. (the "Company") (TSX:UEG) today announced that its biofuels subsidiary Terra Grain Fuels Inc. ("TGF") has completed a series of transactions with EllisDon Design Build Inc. ("EllisDon") including the exchange of mutual releases of pending litigation and the release of the $41 million construction lien filed against the Belle Plaine ethanol facility. Pursuant to the terms of the settlement agreement, EllisDon has made an equity investment in TGF whereby EllisDon has received a 1/3 equity interest in consideration of a $10 million cash investment and settlement of the lien claim. Under the terms of the settlement agreement, if certain financial performance criteria are not met, EllisDon will be entitled to convert its $10 million cash investment into equity of UEG or its successor in December 2010 at the then prevailing market price.

The settlement and equity investment have no impact on previously announced discussions with Energy Savings Income Fund.

Mark Silver, CEO of UEG commented "We are pleased to have settled all claims with EllisDon and welcome them as a partner in our ethanol division. The $10 million cash infusion is expected to provide ample capital to bring the plant to full capacity and EllisDon's investment reaffirms its commitment to ensuring that full production at the Belle Plaine facility is achieved in a timely manner."

Universal Energy Group's common shares and convertible subordinated debentures are listed on the Toronto Stock Exchange under the symbol "UEG" and "UEG.DB", respectively. Universal Energy Group sells natural gas and electricity to residential, small to mid-size commercial and small industrial customers in Canada and the United States, sells long-term water heater rental programs to Ontario residential customers and operates an ethanol manufacturing facility in Belle Plaine, Saskatchewan. Additional information about Universal Energy Group is available on SEDAR (www.sedar.com).

Contact Information

  • Universal Energy Group Ltd.
    Mark L. Silver
    Chief Executive Officer
    (416) 221-9066 ext. 244
    Email: masilver@universalenergy.ca
    Universal Energy Group Ltd.
    Stephen Plummer
    Chief Financial Officer
    (416) 673-1160
    Email: splummer@uegl.ca
    Universal Energy Group Ltd.
    Shawn Dym
    Senior Vice President, Business Development
    (416) 673-4761
    Email: sdym@universalenergy.ca