For the total price of $31 million, Kontrol Energy Corp will acquire ownership of up to 20 MW of solar power generation assets under the Ontario feed-in tariff (FIT) program.
All the sites in question have signed long-term power purchase agreements (PPAs) with the Government of Ontario, with an average duration of 18 years, and are estimated to bring in the approximate net distributable cash flow after all expenses of around $3 million a year.
“The long-term PPAs associated with these assets will add recurring and contracted cash flows to our existing operating cash flows. The successful completion of this transaction will accelerate our ability to build shareholder value and pay dividends,” said Paul Ghezzi, the company’s CEO, adding that these solar power generation assets represent a potentially strong addition to the company’s existing operations.
Eighty percent of the total purchase price will be paid by issuing to the vendor units of Kontrol, each unit consisting of common share and one-quarter of a common share purchase warrant of Kontrol.
Each whole warrant partially comprising a unit will entitle the holder to purchase one Kontrol common share for a price of $2.50 for a period of up to three years.
The remaining 20% balance of the purchase price will be paid in cash. The transaction is expected to close by July 31, 2017.