TORONTO, ONTARIO–(Marketwired – Feb 23, 2016) – UGE International Ltd. (the “Company” or “UGE”) (www.ugei.com) (TSX VENTURE:UG)(OTCQB:UGEIF), a global leader in distributed renewable energy solutions, is pleased to announce it has taken steps to further strengthen its balance sheet through certain debt repayment and forfeiture transactions.
UGE’s debt reduction was conducted through three transactions. Two related party loans to UGE from Chairman Ms. Xiangrong Xie were reduced through repayment of 6,846,216 RMB ($1,054,286 USD) and through debt forfeiture of 1,830,148 RMB ($281,834 USD). Concurrently, and to provide UGE with greater corporate flexibility, $715,000 USD was advanced by another related party as a loan to the Company’s US subsidiary. The loan does not bear interest and is due on January 1, 2018. The net reduction in debt through the three transactions was approximately $621,120 USD. This is in addition to the debt to equity conversion announced February 8, 2016 and confirmed as finalized below, which reduced the Company’s debt obligation by $500,000 USD.
Since the quarter ended September 30, 2015, the Company has reduced related party debt by approximately $1,146,783 USD, a significant step in its goals to reduce debt levels and strengthen its balance sheet.
“With these transactions complete, we have a cleaner, stronger balance sheet for the year ahead,” stated Nick Blitterswyk, CEO of UGE. “We appreciate the support and flexibility our co-founders have provided towards our continued growth in the commercial solar sector.”
Shares for Debt Issuance
The Company has issued 1,240,907 common shares to a related party in settlement of a debt in the amount of CAD$694,908 ($500,000 USD), as previously announced by press release on February 8, 2016 (the “Shares for Debt Transaction”). The shares issued pursuant to the Shares for Debt Transaction are subject to a hold period of four months and a day from the date of issuance, with such hold period expiring on June 23, 2016.
Application of Multilateral Instrument 61-101 (“61-101”)
The aforementioned transactions are “related party transactions” within the meaning of 61-101 and of TSX Venture Exchange Policy 5.9. The Company intends to rely on the exemptions from the formal valuation and minority approval requirements of 61‐101 contained in sections 5.5(b) and 5.7(1)(a) and (b) of MI 61‐101 in respect of related party participation. The securities of the Company are listed on the TSX Venture Exchange and the OTCQB Market in the US, and at the time that the transactions were agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transactions, exceeds 25% of the Company’s market capitalization, and the fair market value of the Shares for Debt Transaction does not exceed $2,500,000.
Letter of Credit
In addition, the Company announces that it has secured the letter of credit required pursuant to the amended share purchase agreement for the acquisition of Endura Energy, as previously announced on February 8, 2016.
UGE delivers immediate savings to businesses through cleaner electricity. We help commercial and industrial clients become more competitive through the low cost of distributed renewable energy. With over 300 MW of experience globally, we work daily to power a more sustainable world. Visit us at www.ugei.com.
Neither 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.
Statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management’s current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in its target markets, the demand for UGE’s products and the availability of funding. These forward-looking statements are made as of the date hereof and UGE does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from UGE’s expectations and projections.