Etrion Corporation has signed a non-binding term sheet to acquire more than 30 megawatts of solar power projects in Italy for cash consideration of approximately 45 million Euros plus the assumption of the related nonrecourse loan facilities.
Marco Northland, the Company’s CEO, commented, “We are very excited about this potential acquisition to strengthen our solar PV portfolio in Italy. If completed, the acquisition would more than triple the size of our company in terms of installed capacity, and it would make us one of the major solar power players in Italy. We look forward to closing the transaction soon.”
The solar power plants that Etrion intends to acquire are expected to produce over 55 million kilowatt hours (“kWh”) of electricity and more than 20 million Euros of cash flow (“EBITDA”) per year. The projects are operational or near-operational, groundbased solar photovoltaic (“PV”) power plants that benefit from the 2009 feed-in-tariff of 0.353 Euros per kWh or the 2010 feed-in-tariff of 0.346 Euros per kWh plus a market price 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 from the start of operations. The acquisition of the solar projects is subject to completing the negotiation of a definitive agreement, which is expected by July 2010, and which will include standard closing conditions such as change of control waivers for the existing debt facility agreements.
The Company intends to fund the acquisition through a bridge loan from its major shareholder, Lundin Petroleum, subject to regulatory approval. The bridge loan would carry interest at LIBOR plus 3%.
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