Finavera: Sale of two wind projects
Finavera CEO Jason Bak states, "This transaction provides a strong return on capital invested in these projects and provides a platform for the next stage of growth for Finavera Wind Energy. Finavera has established itself as an early stage developer of renewable energy projects up to the point where large scale capital is required for construction. The incoming cash will be used to pay down debt, aggressively manage our burn rate, and embark on a fiscally prudent review of opportunities in the marketplace within the next 2 to 6 months. Given the depressed state of a significant number of junior companies with excellent assets, it is an ideal time to be in a strong positive cash position."
Under the terms of the agreement with Pattern, up to $9.3 million will be paid to Finavera upon shareholder approval of the transaction and the completion of Pattern's acquisition of the project companies. The balance of the $28 million will be payable on a milestone basis as the projects proceed to construction financing. Pattern has also agreed to provide a credit facility to the Company at a rate of 10% per annum, which will be repaid in 2013. The agreement is subject to approval from shareholders and the TSX Venture Exchange. The Company will be mailing an Information Circular to shareholders shortly and a shareholder meeting will be scheduled before the end of June to seek approval for the transaction.
In addition to the consideration due to the Company for this transaction with Pattern, Finavera is continuing to develop the 105 megawatt Cloosh Valley Wind Project in Co. Galway, Ireland with SSE plc (SSE:LSE). Cloosh Valley is currently Ireland's largest onshore wind project and the project is expected to attain financing and commence pre-construction activities in Q4 2013. At this point, a final payment of €7.14 million (approx. $9.53 million) is due to the Company, as per the terms of the agreement signed with SSE in August 2010. In addition, Finavera maintains a 10% working interest in the Cloosh Valley Wind Project.
"Based on the Pattern transaction and the value of the Cloosh Valley Wind Project assets, and using a set of conservative working assumptions, Finavera estimates the Company's net asset value to be $0.41 per share. In this market, having cash on hand puts Finavera in a strong position to identify and develop new opportunities for the benefit of shareholders or to return cash to shareholders in the event that opportunities do not arise." concluded Bak.
About Finavera Wind Energy Inc. (www.finavera.com)
Finavera Wind Energy is a company focused on developing wind farms in North America and Ireland. Our mission is to create and operate a diversified portfolio of wind projects while protecting and enhancing the physical and social environment. In British Columbia, Canada, four projects totaling 300 MW have been awarded 25 year AAA-rated Electricity Purchase Agreements and one has received full environmental approval and permitting for construction. In Ireland, the Company has signed a partnership agreement with SSE plc for development of the 105MW Cloosh Valley Wind Project, which is expected to begin construction in 2013. Finavera is continuing to opportunistically review prospects for growth and the enhancement of shareholder value.
About Pattern Energy Group LP (www.patternenergy.com)
Pattern Energy Group is an independent, fully-integrated energy company that develops, constructs, owns, and operates renewable energy and transmission assets in the United States, Canada and Latin America. With a long history in wind energy, Pattern's highly-experienced team of scientists, engineers, construction experts, and legal and financial professionals has developed, financed and placed into operation nearly 3,000 MW of wind power projects. A strong commitment to promoting environmental stewardship drives the Company's dedication to work closely with landowners and communities to create premier renewable energy projects. Pattern currently operates approximately 1,000 MW of installed wind energy capacity in North America and Puerto Rico. The Company's full development pipeline exceeds 3,000 MW of renewable energy and transmission projects. Pattern has offices in San Francisco, San Diego, Houston, New York, and Toronto.
Hydrogenics Investor Relations
Bob Motz, Chief Financial Officer