TORONTO, June 16, 2020 /CNW/ - Polaris Infrastructure Inc.
(TSX: PIF) ("Polaris" or the "Company"), a Toronto-based company engaged in the
operation, acquisition and development of renewable energy projects
in Latin America, announced today
that it signed a Memorandum of Understanding ("MOU") to
acquire 100% of the equity of a Panama-based 10 MW run-of-river hydro project
called Chuspa (the "Project") from Navitas Holdings Inc.
("Navitas").
The key terms of the MOU state that:
- Polaris has the option to acquire 100% of the equity for
nominal up front consideration;
- Such option expires on December 31,
2020.
- To the extent Polaris elects to exercise its option, Polaris
will invest the required equity capital to complete the Project,
estimated to be approximately USD $15
to $20 million.
- Current shareholders of Navitas will receive certain payments
in the event that, after having achieved Project completion, the
cash flows generated by the Project exceed certain minimum defined
thresholds. Such thresholds are based on Polaris generating a
minimum return of 15% of the equity committed to complete the
Project.
The Project has the following attributes:
- Construction ready project with all licenses and permits in
hand that are required to both complete construction and operate
the run-of-river hydro project;
- Minor construction works have already been completed such as
road access, foundation preparation for turbine house;
- Significant down payments have already been made on two
turbines by the sellers;
- Contracts for approximately 40-50% of expected production are
in hand at US$85 per Mwhr;
- Anticipated timeline to COD completion of 12-15 months once
mobilization commences; and
- Polaris Infrastructure plans to fund the construction with cash
on hand.
"We are very pleased to have signed this MOU" stated
Marc Murnaghan, Chief Executive
Officer of Polaris Infrastructure, "It is structured in a way that
enables Polaris to ensure that we are confident that key risks
associated with Covid-19 can be managed before we commence
construction of the project and close the acquisition. We are
optimistic this can be done in the coming months. The
addition of a further run-of-river hydro project provide further
geographic diversification by investing in Panama and is in keeping with the strategy of
diversification and growth in the renewable sector within the
region. We are also leveraging the experience gained recently
in Peru, as the transactions have
many similarities. We strongly believe that by adding a third
country to the generation platform is beneficial to our
shareholders. In addition, we believe that there are other
opportunities to grow in Panama
and partnering with Navitas on this project will provide a platform
from which to grow."
The MOU is non-binding and there is no assurance that the
transaction will be completed on the terms described above or at
all.
About Polaris Infrastructure
Polaris Infrastructure is
a Toronto-based company engaged in
the operation, acquisition and development of renewable energy
projects in Latin America. Currently, the Company owns and
operates a geothermal project located in Nicaragua and hydro projects located in
Peru.
Cautionary Statements
This news release contains certain "forward-looking information"
within the meaning of applicable Canadian securities laws, which
may include, but is not limited to, statements with respect to
future events or future performance, management's expectations
regarding the ability to complete the acquisition of the Project on
the terms described in this press release or at all, the
anticipated MW of the Project, the anticipated investments required
to complete construction of the Project, the anticipated timeline
required to achieve commercial operation, the ability to fund
construction with cash on hand and funds generated through
operations, the expected benefits from the acquisition of the
Project and diversification into Panama and the availability of similar
acquisition opportunities in Panama. Such forward-looking information
reflects management's current beliefs and is based on information
currently available to management. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "predicts", "intends", "targets", "aims",
"anticipates" or "believes" or variations (including negative
variations) of such words and phrases or may be identified by
statements to the effect that certain actions "may", "could",
"should", "would", "might" or "will" be taken, occur or be
achieved. A number of known and unknown risks, uncertainties
and other factors may cause the actual results or performance to
materially differ from any future results or performance expressed
or implied by the forward-looking information. Such factors
include, among others, general business, economic, competitive,
political and social uncertainties; the actual results of current
geothermal and hydro energy production, development and/or
exploration activities and the accuracy of probability simulations
prepared to predict prospective geothermal resources; changes in
project parameters as plans continue to be refined; possible
variations of production rates; failure of plant, equipment or
processes to operate as anticipated; accidents, labor disputes and
other risks of the geothermal and hydro power industries; political
instability or insurrection or war; labor force availability and
turnover; delays in obtaining governmental approvals or in the
completion of development or construction activities, or in the
commencement of operations; the ability of the Company to continue
as a going concern and general economic conditions, as well as
those factors discussed in the section entitled "Risk Factors" in
the Company's Annual Information Form for the year ended
December 31, 2019 which is available
on SEDAR. These factors should be considered carefully, and
readers of this press release should not place undue reliance on
forward-looking information.
Although the forward-looking information contained in this press
release is based upon what management believes to be reasonable
assumptions, there can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information. The information in this press
release, including such forward-looking information, is made as of
the date of this press release and, other than as required by
applicable securities laws, Polaris Infrastructure assumes no
obligation to update or revise such information to reflect new
events or circumstances.
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SOURCE Polaris Infrastructure Inc.