Reservoir Capital Corp. Enters Into Definitive Agreement to Triple its Indirect Interest in Mainstream Energy Solutions Limited

Source Press Release
Company Reservoir Capital Corp. 
Tags Corporate Deals, Deals, Renewable Energy, Power
Date May 07, 2019

Reservoir Capital Corp. (CSE: REO) ("REO" or the "Company") is pleased to announce that it has entered into a definitive share exchange agreement (the "Definitive Agreement") with Kainji Power Holding Limited ("KPHL") and certain shareholders (the "Vendors") of Mainstream Energy Solutions Limited ("MESL"), pursuant to which REO will acquire shares of both MESL and KPHL in exchange for the issuance of REO common shares("REO Shares") to the Vendors (the "Transaction"). The Transaction constitutes the second stage of REO's investment into MESL and will result in the Company increasing its indirect economic interest in MESL from 1.2% to approximately 3.8%. On September 21, 2018, REO underwent a reverse takeover transaction when it acquired a 60% interest in KPHL, resulting in the Issuer owning its initial indirect minority interest in MESL.

Mainstream Energy Solutions Limited

MESL is the concessionaire and operator of the two largest hydropower plants on the Niger River in Nigeria, with a current aggregate operating capacity of 922MW and plans to increase that to 1,300MW. The two facilities are world-class assets operating under a long-term concession agreement and multiple PPAs with the national grid as well as large private eligible customers. The proven hydrology of MESL's reservoirs allows balanced power production all year long in a demand environment that is critically short of dependable and affordable power.

Management of REO anticipates that the completion of the Transaction will increase REO's net operating capacity to approximately 35MW (from around 11MW currently).

Reservoir CEO Lewis Reford stated: "REO, its Board and Management are extremely pleased to have finalized the definitive agreement that more than triples REO's economic interest in MESL and broadens its shareholder base in a single cashless all-share transaction. We look forward to deepening and reinforcing our relationship with MESL and its key founding shareholders. Indeed, MESL has been a very successful clean power investment for REO, performing and delivering results to all its stakeholders - in particular, the Nigerian public."

Details of the Transaction

According to the Definitive Agreement, REO will acquire an additional 9,950,912 shares of MESL, to be held through KPHL, and an additional 350 shares of KPHL, bringing REO's total equity interest in KPHL to 95% and KPHL's interest in MESL to slightly over 4%, in exchange for 269,942,233 new REO Shares issued to the Vendors and their designated beneficiaries (the "Shareholders").

Upon completion of the Transaction, REO will have 481,047,377 common shares outstanding with one Shareholder holding 45.72% of REO common shares. The Agreement was negotiated at Arm's Length and replaces the Memorandum of Understanding announced on April 16, 2019.

The issuance of the REO Shares will be subject to approval of the Canadian Securities Exchange ("CSE"), and such REO Sharesmay be subject to restrictions on transfer under Canadian securities law and CSE policies.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd