Transeastern Power Trust Announces Refinancing of Existing Debt Facilities
May 13, 2016
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
TORONTO, ONTARIO — May 13, 2016: Transeastern Power Trust ("Transeastern" or the "Trust") (TSX-V: TEP.UN; TEP.DB) is pleased to announce that is has entered into a non-binding term sheet with a Romanian lender for the refinancing of €17.5 million of existing debt 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..
Pursuant to the refinancing, the current interest rate on the debt facilities will be reduced from 7% per annum, 8.48% per annum commencing on January 1, 2017, to 5.95% per annum until maturity of the facilities on October 31, 2023. The reduction in the interest rate will result in an estimated annual interest saving to the Trust of approximately $700,000. The refinancing is subject to certain conditions precedent including the deleveraging of the Corabia and PowerLIVE assets currently contemplated as part of the previously announced acquisitions of wind and hydro projects. The closings for the acquisitions and the refinancing are expected to occur at the end of June 2016.
Mr. J. Colter Eadie, Chief Executive Officer of Transeastem, commented: "We continue to enjoy a constructive relationship with our senior lenders as evidenced by this refinancing. Completing the refinancing of the debt at our solar operations is a critical step in closing the previously announced acquisitions of wind and hydro renewable generation operations and improving the profitability of Transeastern by lowering its total cost of capital."
Transeastern is also pleased to announce that it has closed a second tranche of its previously announced private placement of 316,399 units, comprised of units and warrants of the Trust, at a subscription price of $0.70 per unit for gross proceeds of approximately $222,000. The net proceeds of this second tranche shall be primarily used for working capital purposes. In connection with the closing of this second tranche, Transeastern issued non-transferable broker warrants to purchase up to 22,145 trust units. For further details on the private placement, see the previous press release of the Trust dated April 5, 2016.
For further information please contact:
|Ravi Sood||J. Colter Eadie||Michael Murphy|
|+1 (647) 987-7663||+40 736 372 724||+1 (416) 625-5064|
|[email protected]||[email protected]||[email protected]|
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 dated April 29, 2016, 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.