VANCOUVER, Dec. 4, 2014 /CNW/ - Finavera Wind Energy Inc.
('Finavera Wind Energy', 'Finavera' or the 'Company') (TSX-V:
FVR), a developer of renewable energy projects, has released its
unaudited condensed consolidated interim financial statements and
related management discussion and analysis ("MD&A") for the
three and nine month periods ended September
30, 2014.
Highlights
- The Pattern Transaction: In July
2014, the Company entered into an early settlement agreement
with Pattern Renewable Holdings Canada ULC ("Pattern") where the
parties settled the final payment that the Company was to receive
at the financial close of the Meikle Wind Energy Project. The
Company settled all of its debts with Pattern, including a
development loan, working capital facility, interest, other amounts
deductible under the Purchase and Sale Agreement, and legal
fees. The total consideration received from Pattern in 2014
was $24,723,881.
- The SSE Transaction: In July
2014, the Company entered into an agreement with SSE
Renewables Ltd. ("SSE") and completed the sale of its remaining 10%
interest in the Cloosh Valley Wind Project in Ireland (the "Cloosh Project") for €2.1
million. Concurrent with the sale, the Company settled debt with a
secured creditor for $1.5 million,
plus interest and legal fees.
The Company held a 100% interest in the Cloosh Project which it
began developing in 2005, and sold 90% of it to SSE in 2010 for
€8.40 million. At the time, €1.26 million was received on signing
and at the closing of project construction financing, currently
anticipated in the first quarter of 2015, the Company is to receive
the remaining €7.14 million (approximately $10.1 million).
- The Solar Alliance of America Transaction: In
August 2014, the Company signed an
agreement to acquire Solar Alliance of America, Inc. ("Solar
Alliance") for US $4 million cash and
US $2 million in Finavera shares,
valued at $0.21 per share. This
transaction represents Finavera's entry into the US residential
solar market. The Company intends to finance this transaction
from the €7.14 million due from SSE or by way of a bridge financing
through the issuance of debt. The Company is currently in
discussions with a number of potential debt providers. Target
for closing the transaction is Q1 2015.
Financial Highlights
- Net Income: Generated net income of $18,416,244 (2013: Net loss of $1.4 million) and $14.3
million (2013: Net loss of $4.0
million) during the three and nine months ended September 30, 2014, respectively.
- Cash and Working Capital: Closed third quarter of 2014
with a working capital deficit of $5.2
million (Q2 2014: $24.2
million) and cash of $802,302.
During the third quarter, the Company reduced its total
liabilities by 76% as a result of the asset sales notes above.
The Company expects that it will receive €7.14 million
($10.1 million) from SSE in the first
quarter of 2015.
Management Comments
Jason Bak, the Company's Founder
and CEO, commented, "The third quarter of 2014 was transformative
for Finavera. The sale of our wind assets, reduction of debt and
our agreement to acquire Solar Alliance of America, Inc. marked our
entry in to the US residential solar market. This market is
growing at 60 – 70% annually and provides an excellent platform for
the Company to expand Solar Alliance in the coming year to take
advantage of the world changing opportunity presented by the
unprecedented growth in residential distributed generation."
Third Quarter Results
During the three months ended September
30, 2014, Finavera recorded a net income of $18.4 million (earnings per share of $0.46) compared with a net loss of $1.4 million (loss per share of $0.03) in Q3 2013. Current period net income is
mainly comprised of the gains from the sale of the Company's wind
projects totaling $18.1 million, a
reversal of prior project costs of $0.3
million, gains on debt settlements of 0.3 million and
operating costs of $0.3 million. In
Q3 2013, the loss is comprised of operating costs of $0.8 million, financing costs of $0.5 million and project costs of $0.1 million.
During the nine months ended September
30, 2014, Finavera recorded net income of $14.3 million (earnings per share of $0.36) compared to a net loss of $4.0 million for the comparable period in 2013
(loss per share of $0.10). It is
comprised of gain on sale of projects of $18.1 million (2013: $nil), operating costs of
$1.3 million (2013: $1.8 million), interest and financing costs of
$1.0 million (2013: $1.6 million), project development costs of
$1.1 million (2013: $0.2 million), and contractual payroll
obligations of $0.6 million (2013:
$nil). The largest difference in operating expenses between the
periods was professional fees of $174k (2013 - $609k), a difference of $435k, mainly due to legal provisions of
$350k booked in 2013 and which were
settled in 2014.
Jason Bak, CEO
About Finavera Wind Energy Inc.
(www.finavera.com)
Finavera Wind Energy is a
company focused on developing renewable energy opportunities.
Our mission is to create and operate a diversified portfolio of
renewable energy projects while protecting and enhancing the
physical and social environment. Finavera has developed over
360MW of wind energy projects and subsequently sold them to
utilities or large independent power producers. Finavera is
continuing to opportunistically review prospects for growth and the
enhancement of shareholder value.
Statements in this news release, other than purely historical
information, including statements relating to the Company's future
plans and objectives or expected results, constitute
Forward-looking statements. The words "would", "will", "expected"
and "estimated" or other similar words and phrases are intended to
identify forward-looking information. Forward-looking information
includes the anticipated completion of the transaction and the
related closing timeline and structure. Forward-looking information
is subject to known and unknown risks, uncertainties and other
factors that may cause the Company's actual results, level of
activity, performance or achievements to be materially different
than those expressed or implied by such forward-looking
information. Such factors include, but are not limited to:
uncertainties related to the ability to raise sufficient capital,
changes in economic conditions or financial markets, results of due
diligence investigations, litigation, legislative or other
judicial, regulatory and political competitive developments and
technological or operational difficulties. Consequently, actual
results may vary materially from those described in the
forward-looking statements.
Completion of the transaction is subject to a number of
conditions, including Exchange acceptance and board approval. There
can be no assurance that the transaction will be completed as
proposed or at all. Trading in the securities of Finavera Wind
Energy should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits
of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
SOURCE Finavera Wind Energy Inc.