Capstone Turbine Grants Turbine International Exclusive Distribution Rights for the Oil and Gas Market in Russia in Exchange ...
October 18 2017 - 08:30AM
Capstone Turbine Corporation (www.capstoneturbine.com)
(NASDAQ:CPST), the world's leading clean technology manufacturer of
microturbine energy systems, announced today that it has executed
an agreement that appoints a new exclusive oil and gas distributor
in Russia. Under the terms of the agreement, Capstone will grant
Turbine International and its affiliate, MTE Service, the sole
distribution rights for Capstone products and services in the
Russian oil and gas sector in exchange for $6.4 million in cash.
MTE Service (www.mte.services), is a wholly
owned subsidiary of Hispania Petroleum S.A. (Hispania). Hispania is
an independent privately owned oil and gas company with operations
across the globe, ranging from South America, Europe and Russia.
Hispania began its operations in the 1980s initially focusing on
trading crude oil and products, and later transitioned into
exploration and production. Hispania has had great success
operating in the Russian market. Their production has steadily
increased since 1992 from the oil fields in the Perm region that it
operates alongside its joint venture partner, Lukoil Oil
Company.
“This new agreement for the oil and gas distribution rights in
Russia completes our multiyear reorganization effort of the Russian
marketplace for both the combined heat and power market, renewable
energy market and now the oil and gas market. Through this process
we have moved from one distribution partner covering multiple
verticals, to multiple highly qualified partners for our three
major verticals for distribution of our product in Russia and the
surrounding CIS states,” stated Darren Jamison, Capstone’s
President and Chief Executive Officer. “Capstone is looking forward
to revitalizing the Russian oil and gas market with our new
partner, and we believe the overall Russian market reorganization
should yield long-term positive results with higher future revenue
and lower overall business risk,” added Mr. Jamison.
Under the terms of the agreement, Turbine International will
provide multiple cash payments to Capstone totaling $6.4 million
dollars with three payments totaling $2.5 million by February 1,
2018, and the remaining $3.9 million paid over a three-year period
starting in August 2018. Turbine International has made a good
faith payment of $100,000 upfront with the balance being secured by
a promissory note and corporate guarantee from Hispania.
“As part of the new agreement, Capstone will provide product and
spare parts pricing discounts, sales and technical training, along
with overall general business support to assist Turbine
International and its affiliate, MTE Service, to further develop
this key Russian oil and gas market which already has approximately
45MWs of installed Capstone product,” said Jim Crouse, Capstone’s
Executive Vice President of Sales and Marketing. “Capstone will
assign Turbine International its multimillion-dollar BPC
Engineering past due reserved accounts receivable. Additionally, we
will also be providing assistance to both companies during the
transition of the distributorship to minimize any potential impact
and business interruption to critical Russian energy customers,”
added Mr. Crouse.
“Hispania looks forward to partnering with Capstone as its
exclusive distributor of cutting-edge microturbines in the oil and
gas sector in Russia through the subsidiaries of the Hispania
group,” said Jose D. Peñafiel, Chief Executive Officer of
Hispania. “The Hispania group has previously worked as a
distributor and sales representative for Centralift, Tenaris, Smith
Meter, Invalco and Cameron International. Hispania looks
forward to pairing its long history in the oil and gas sector in
Russia with its experience as a distributor in partnership with
Capstone. The Hispania group brings a high standard of operational
excellence and transparency in providing service to Capstone’s
existing and future customers in the Russian oil and gas sector,”
added Mr. Peñafiel.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com)
(NASDAQ:CPST) is the world's leading producer of low-emission
microturbine systems and was the first to market commercially
viable microturbine energy products. Capstone has shipped over
9,000 Capstone Microturbine systems to customers worldwide. These
award-winning systems have logged millions of documented runtime
operating hours. Capstone is a member of the U.S.
Environmental Protection Agency's Combined Heat and Power
Partnership, which is committed to improving the efficiency of the
nation's energy infrastructure and reducing emissions of pollutants
and greenhouse gases. A UL-Certified ISO 9001:2015 and ISO
14001:2015 certified company, Capstone is headquartered in
the Los Angeles area with sales and/or service centers in
the United States, Latin America, Europe, Middle East and
Asia.
This press release contains "forward-looking statements," as
that term is used in the federal securities laws, including
statements regarding the prospect for sale of our products in the
Russian market, oil and gas industry and Russian market generally.
Forward-looking statements may be identified by words such as
"expects," "objective," "intend," "targeted," "plan" and similar
phrases. These forward-looking statements are subject to numerous
assumptions, risks and uncertainties described in Capstone's
filings with the Securities and Exchange Commission that may cause
Capstone's actual results to be materially different from any
future results expressed or implied in such statements. Capstone
cautions readers not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Capstone undertakes no obligation, and specifically
disclaims any obligation, to release any revisions to any
forward-looking statements to reflect events or circumstances after
the date of this release or to reflect the occurrence of
unanticipated events.
"Capstone" and "Capstone Microturbine" are registered trademarks
of Capstone Turbine Corporation. All other trademarks
mentioned are the property of their respective owners.
CONTACT:
|
Capstone Turbine
Corporation |
|
Investor and investment
media inquiries: |
|
818-407-3628 |
|
ir@capstoneturbine.com |
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