VANCOUVER, Jan. 16, 2013 /PRNewswire/ - Nevada Geothermal Power Inc. (NGP) (TSX.V: NGP) announces that the Company and funds managed by EIG Global Energy Partners (collectively "EIG"), the mezzanine lender for the Blue Mountain Geothermal Project, have entered into an equity transfer agreement (the "Agreement") dated January 11, 2013 under which NGP will transfer its 100% interest in NGP Blue Mountain HoldCo LLC ("BM HoldCo") to Blue Mountain Power, LLC, a company owned by EIG. BM HoldCo holds a 100% interest in NGP Blue Mountain I LLC ("NGP 1") which in turn owns all of the project assets including geothermal leases, operating permits and licenses, the power plant, wellfield and all other physical or contractual assets of the Blue Mountain Project.
On closing of the Agreement, EIG shall accept the transfer of ownership of BM HoldCo to EIG's Blue Mountain Power, LLC in full satisfaction of the then outstanding principal, accrued unpaid interest and any other cash or fee obligations owing by BM HoldCo under its loan agreement with EIG. In addition, EIG's cash settled options shall terminate. NGP shall receive $500,000 in satisfaction of a current account receivable from BM HoldCo.
As at December 31, 2012, BM HoldCo owed approximately $97.4 million to EIG. The project is currently in default on the subordinated EIG debt, formal notice of such having been delivered by EIG on January 11, 2013. NGP 1, the BM HoldCo subsidiary which will also be transferred to EIG on closing of the Agreement, holds a senior debt facility with approximately $84.2 million owing as at December 31, 2012, which is fully secured by the project assets. On closing of the Agreement, both the mezzanine and senior debt obligations will therefore be removed from NGP.
NGP will continue as project operator of the Faulkner 1 geothermal power plant and will provide management and administrative services through its operating subsidiary, Nevada Geothermal Operating Company LLC ("OPCO") and will receive its normal operating fee under its existing operating agreement, during a cooperative transition period of up to twelve months from the BM HoldCo equity transfer date. Under the Agreement, EIG may by written notice at any time during the transition period, elect to replace the operator, or may purchase OPCO for a nominal amount plus the value of the then existing working capital capped at $350,000.
The ownership transfer of BM HoldCo under the Agreement is subject to certain conditions precedent, including approval by the Federal Energy Review Commission ("FERC"), approval of a 2013 project budget by the senior lender, approval by certain lease holders and final approval by the TSX-V Exchange. Notification must be given to certain other project related parties and US regulatory agencies prior to closing. The Agreement is expected to close in approximately 2 months.
About Nevada Geothermal Power Inc.:
Nevada Geothermal Power Inc. is an experienced renewable energy producer focusing on the development of CLEAN electrical power from high temperature geothermal resources in the United States. NGP currently owns a 100% leasehold interest in several properties in Nevada and California, and a 50% interest in Crump Geyser, in Oregon. These properties are at different levels of exploration and development.
This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition, or alteration to the information catered in this Press Release including such forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Nevada Geothermal Power Inc.
Brian D. Fairbank, P. Eng. President & CEO
Toll Free: 866-688-0808
Toll Free: 866-688-0808
SOURCE Nevada Geothermal Power Inc.