Reservoir Capital Corp. Enters Into Memorandum of Understanding to Increase its Nigerian Hydro Investment

Source Press Release
Company Reservoir Capital Corp. 
Tags Corporate Deals, Deals, Renewable Energy, Power
Date April 16, 2019

Reservoir Capital Corp. ("REO") is pleased to announce that it has reached agreements in principle and non-binding Memorandum of Understanding dated April 3, 2019 with Kainji Power Holding Limited ("KPHL") and certain shareholders (the “Vendors”) of Mainstream Energy Solutions Limited (“MESL”), pursuant to which REO proposes to substantially increase both its indirect economic interest in MESL and its direct stake in KPHL in exchange for the issuance of common shares of REO (“REO Shares”) to the Vendors and their designated beneficiaries (the “Transaction”). The Transaction is subject to the terms of definitive share exchange agreements (the “Definitive Agreements”) to be negotiated among REO and the Vendors.

MESL is concessionaire of two leading Nigerian hydro power plants with a combined operating capacity of 922MW. Management of REO anticipates that completion of the Transaction would increase MESL’s net capacity up to 37MW (from 18.7MW currently).

Subject to the terms of the Definitive Agreements, REO would acquire over 10 million shares of MESL, to be held through KPHL, and an additional 35% equity interest in KPHL, bringing REO’s total equity interest in KPHL to 95%, in exchange for approximately 270 million REO Shares. REO is also engaged in talks with the owner of the last remaining 5% of KPHL for an envisaged subsequent transaction that would bring REO closer to its target of owning up to 100% of KPHL.

Reservoir CEO Lewis Reford stated, “REO, its Board and Management are extremely pleased to have reached agreements-in-principle to increase REO’s economic interest in MESL and broaden its shareholder base in a potential all-share transaction. We look forward to deepening and reinforcing our relationship with MESL and its key founding shareholders. Indeed, MESL is proving to be a first-class clean power company, performing and delivering results to all its stakeholders – in particular, the Nigerian public. MESL has been a very successful investment for REO and we will be delighted to welcome some of its founding shareholders as new REO shareholders after the completion of the Definitive Agreements.”

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

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd