$45 Million Valued All Stock Acquisition of Solar Flow-Through Funds Ltd. Closes
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$9.2 million in revenue for SFF calendar year 2023;$9.4 million in revenue for SFF calendar year 2022
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50.76 MW combined capacity of SFF and
SolarBank independent power producer ("IPP") assets (32 MW operating and 18.76 MW under construction)
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28.8 megawatts ("MW") combined capacity from over a total of 70 operating solar sites located in
Ontario under long term contracts with the Ontario IESO are owned by SFF
- 14.97 MW aggregate discharge capacity from three battery energy storage system projects that are under construction by SFF In Ontario that are expected to operate under long term guaranteed capacity contracts from the Ontario IESO
This news release constitutes a "designated news release" for the purposes of the Company's prospectus supplement dated
Under the terms of the Transaction, SolarBank has agreed to issue up to 5,859,561 common shares of SolarBank ("SolarBank Shares") for an aggregate purchase price of up to
Image above presents Solar Flow-Through Funds' 70 solar photovoltaic generation projects totalling 28.8 MW DC. The projects operate under the Ontario FIT program.
The consideration for the Transaction consists of an upfront payment of approximately 3,575,632 SolarBank Shares (
Highlights and Benefits of the Transaction:
- Continues SolarBank's strategy of creating value for all stakeholders by growing its portfolio of cash generating independent power producer assets.
- 28.8 MW of long life assets that have favorable feed in tariff rates into the 2030s.
- Expansion into ownership of battery energy storage projects (14.97 MW) and electric vehicle charging stations – both key components of the net zero energy transition.
- All stock transaction preserves cash for continued funding of the Company's development pipeline.
Dr.
Agreement details and timing
The Transaction was carried out by way of a court-approved plan of arrangement under the Business Corporations Act (
There are three classes of SFF Tracking Shares. Each class of SFF Tracking Shares is linked to a separate lawsuit where SFF, as plaintiff, is seeking to recover damages for the termination of certain solar power project development contracts. If the lawsuit that is linked to a class of SFF Tracking Shares is successful, the shareholder of such SFF Tracking Shares will have the option to receive its pro-rata share of the net settlement award or to convert such amount into SolarBank Shares.
Under the terms of the Transaction, SFF shareholders received consideration of (i)
All SolarBank Shares issued in the Transaction, including SolarBank Shares issued on conversion of the CVRs or SFF Tracking Shares, if any, are subject to transfer restrictions pursuant to a release schedule as set forth in the table below:
Release Date |
Percentage |
Closing |
0 % |
6 Months from Closing |
5 % |
12 Months from Closing |
5 % |
18 Months from Closing |
5 % |
24 Months from Closing |
5 % |
27 Months from Closing |
20 % |
30 Months from Closing |
20 % |
33 Months from Closing |
20 % |
36 Months from Closing |
20 % |
In connection with the closing of the Transaction, Mr.
The Company expects to pay an advisory fee in connection with the closing of the Transaction.
Details regarding the other terms of the Transaction are set out in the Agreement, which is available on SEDAR+ at www.sedarplus.com.
Unless otherwise indicated all dollar values in this news release are in Canadian dollars.
None of the securities to be issued pursuant to the Agreement have been or will be registered under the United States Securities Act of 1933, as amended (the "
About
SolarBank Corporation is an independent renewable and clean energy project developer and owner focusing on distributed and community solar projects in
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, "forward-looking statements") that relate to the Company's current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "expects", "will continue", "is anticipated", "anticipates", "believes", "estimated", "intends", "plans", "forecast", "projection", "strategy", "objective" and "outlook") are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. In particular and without limitation, this news release contains forward-looking statements pertaining to: the settlement of terms of the debt financing for the BESS portfolio, and such financing proceeding; the availability and expected reliance on certain exemptions from
Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. In making the forward looking statements included in this news release, the Company has made various material assumptions, including but not limited to: assumptions regarding the combined company following completion of the Transaction; obtaining the necessary regulatory approvals for the Company's other projects; that regulatory requirements will be maintained; general business and economic conditions; the Company's ability to successfully execute its plans and intentions; the availability of financing on reasonable terms; the Company's ability to attract and retain skilled staff; market competition; the products and services offered by the Company's competitors; that the Company's current good relationships with its service providers and other third parties will be maintained; and government subsidies and funding for renewable energy will continue as currently contemplated. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, investors should not place undue reliance on these forward-looking statements.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under "Forward-Looking Statements" and "Risk Factors" in the Company's Annual Information Form for the most recently completed financial year, and other public filings of the Company, which include: risks related to the successful integration of acquisitions; the Company may be adversely affected by volatile solar power market and industry conditions; the execution of the Company's growth strategy depends upon the continued availability of third-party financing arrangements; the Company's future success depends partly on its ability to expand the pipeline of its energy business in several key markets; governments may revise, reduce or eliminate incentives and policy support schemes for solar and battery storage power; general global economic conditions may have an adverse impact on our operating performance and results of operations; the Company's project development and construction activities may not be successful; developing and operating solar projects exposes the Company to various risks; the Company faces a number of risks involving Power Purchase Agreements and project-level financing arrangements; any changes to the laws, regulations and policies that the Company is subject to may present technical, regulatory and economic barriers to the purchase and use of solar power; the markets in which the Company competes are highly competitive and evolving quickly; an anti-circumvention investigation could adversely affect the Company by potentially raising the prices of key supplies for the construction of solar power projects; foreign exchange rate fluctuations; a change in the Company's effective tax rate can have a significant adverse impact on its business; seasonal variations in demand linked to construction cycles and weather conditions may influence the Company's results of operations; the Company may be unable to generate sufficient cash flows or have access to external financing; the Company may incur substantial additional indebtedness in the future; the Company is subject to risks from supply chain issues; risks related to inflation; unexpected warranty expenses that may not be adequately covered by the Company's insurance policies; if the Company is unable to attract and retain key personnel, it may not be able to compete effectively in the renewable energy market; there are a limited number of purchasers of utility-scale quantities of electricity; compliance with environmental laws and regulations can be expensive; corporate responsibility may adversely impose additional costs; the future impact of COVID-19 on the Company is unknown at this time; the Company has limited insurance coverage; the Company will be reliant on information technology systems and may be subject to damaging cyberattacks; the Company may become subject to litigation; there is no guarantee on how the Company will use its available funds; the Company will continue to sell securities for cash to fund operations, capital expansion, mergers and acquisitions that will dilute the current shareholders; and future dilution as a result of financings.
The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for the Company to predict all of them, or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
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