Deutsche Bank Solar Assets Acquired
Etrion Corporation, a Canadian energy company, has signed a definitive sale and purchase agreement to acquire a portfolio of Deutsche Bank solar assets in Italy for 10.3 million Euros plus a contingent deferred payment of 1.5 million Euros.
The Deutsche Bank assets being acquired include 6 megawatts ("MW") of operating assets and 10 MW of permitted projects ready for construction in the Puglia region plus a pipeline of more than 150 MW in various stages of permitting.
The operating assets consist of 6 MW of ground-based solar photovoltaic ("PV") plants, producing over 10,250 kilowatt hours ("kWh") of electricity and approximately 4 million Euros of cash flow (EBITDA) per year. These plants benefit from the 2009 feed-in-tariff of 0.353 Euros per kWh plus a spot rate of approximately 0.08 Euros per kWh. The Italian feed-in-tariff is a premium purchase price for renewable electricity that is guaranteed by the Italian government for 20 years. The operating plants also benefit from an existing facility agreement with Societe Generale and Dexia for up to 45 million Euros available on the basis of 90:10 debt-to-equity, of which 28 million Euros have been drawn to date.
Marco Northland, the Company's CEO, commented, "This acquisition represents an important leap forward for Etrion. We are acquiring a combination of operating assets with immediate revenue, projects for construction in 2010, a pipeline for 2011 and relationships with highly qualified local developers. We look forward to building out the Italian pipeline that Deutsche Bank developed over several years."
The acquisition of the Deutsche Bank assets is scheduled to close by April 30, 2010, and is subject to typical closing conditions.
The Company intends to fund the acquisition through a combination of cash on hand and a bridge loan from its major shareholder, Lundin Petroleum. The bridge loan carries interest at LIBOR plus 3%.
