Toronto, Ontario–(Newsfile Corp. – April 4, 2017) – UGE International Ltd. (TSXV: UGE) (the “Company” or “UGE”), a leader in renewable energy solutions for the commercial and industrial sector, today announced that it has purchased substantially all of the assets of Carmanah Solar Power Corp. (“CSPC”), through a majority-owned joint venture with affiliates of OYA Solar Inc. (“OYA”) and Polar Racking, Inc. (“Polar”). CSPC is a wholly owned subsidiary of Carmanah Technologies Inc. (“CMH”).
CSPC is headquartered in Toronto and is one of the longest tenured and most experienced solar businesses in Canada. Since 2000, CSPC has held a leading market share in Canada in the same mid-scale categories that UGE focuses on. Together, UGE and CSPC combine leading market shares in rooftop and ground-mount projects to further strengthen UGE’s position in Canada and the US.
The acquisition of the CSPC assets was completed through a joint venture between UGE and affiliates of OYA and Polar (the “Transaction”). UGE owns 60% of the joint venture and manages the entity. OYA and related entities currently have over 200MW of projects under development. In addition to executing on contracted and pipeline projects acquired in the Transaction, the joint venture entity will be the exclusive provider of engineering, procurement, and construction (“EPC”) services to OYA, with expectations to begin construction on portions of its pipeline in 2017.
“CSPC has a long, proud history, and is a very complementary group that we are excited to welcome to the UGE team,” stated Nick Blitterswyk, CEO of UGE. “Through this Transaction we grow our market share, consolidate a competitor, and gain a strategic relationship with OYA, further boosting our expectations for 2017 and beyond.”
“We are very excited to partner with UGE in the acquisition of CSPC. This further solidifies our collective positions in the North American market, allowing us to leverage greater economies of scale when delivering mid to large scale grid-connected PV plants, which ultimately means greater savings and better service for our customers,” added Manish Nayar, Managing Partner of OYA.
Financial Details of the Transaction
To purchase 60% ownership in the joint venture, UGE paid consideration of CAD$200,000 through the issuance of 363,636 common shares to the affiliates of OYA and Polar, each share having a deemed issuance price of $0.55.
Total consideration paid by the joint venture to Carmanah was CAD$2,699,229, which included working capital amounts specific to projects currently under construction. Of the working capital amount, CAD$2.4 million was provided through a loan from The M.H. Brigham Foundation, an arm’s length third party to the Transaction (the “Loan”). The Loan accrues at a rate of 10% per annum and is payable on demand. The Loan is guaranteed by UGE, and in consideration for the provision of the Loan, The M.H. Brigham Foundation received 218,182 common shares of UGE representing a value of $120,000 being 5% of the Loan amount.
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