Sierra Geothermal Power Corp. (TSX VENTURE: SRA) ("SGP") announced
that it is mailing a management circular to its shareholders. The
circular urges shareholders to support the current Board and oppose
an attempt by dissidents to seize control of the Board at a special
meeting scheduled for January 26, 2010.
In a letter to shareholders accompanying the circular, SGP's
President and Chief Executive Officer Gary Thompson cautioned
shareholders that the likely objective of the dissidents is to help
a competitor, Ram Power Corp., to acquire SGP at a discount price.
Below is the text of Mr. Thompson's letter.
Dear Fellow Shareholder,
Your vote has never been more important. A dissident
shareholder, controlled by investor Richard Rule, is attempting for
the second time to take control of your Board. We believe Mr.
Rule's objective is to help our competitor Ram Power, Corp. to
acquire SGP at a discount price.
Your Board is open to all strategic alternatives, including a
transaction if it accurately reflects the value of SGP and your
investment. A discount price transaction is not in the best
interest of SGP's shareholders. We urge you to safeguard your
investment and vote the GREEN proxy against Mr. Rule and in support
of your Board and management.
Evidence for Mr. Rule's Discount Price Objective
Mr. Rule and his associates first disclosed their discount price
objective to us in July 2009, as you will read in detail in the
enclosed Management Circular. At the time Mr. Rule and his
associates were developing a complex financial transaction to
create Ram Power by combining a number of geothermal companies with
a shell company. Mr. Rule wanted SGP to participate in the
transaction at a price equivalent to $0.186 for each SGP share, an
18% discount to our market price then and a 31% discount to our
recent market price of $0.27.
Your Board requested an explanation. Among other issues, your
Board was concerned about the price premium provided to
shareholders of Polaris Geothermal Inc., one of the geothermal
companies involved in the proposed transaction. Put simply, your
Board was aware that Mr. Rule and his associates faced a conflict
of interest. They owned much more of Polaris than SGP. Your board
had to ensure that the price for SGP was fair to all shareholders
and was not providing a benefit to Mr. Rule and his associates at
your expense.
Mr. Rule's Two Attempts to Take Control of SGP
Faced with your Board's questions, Mr. Rule launched his first
attempt to take control of SGP. In July he requisitioned a special
shareholders' meeting to remove your Board and replace it with an
unnamed slate of nominees. This attempt failed as the requisition
was defective.
Meanwhile, the proposed business combination advanced without
SGP and established Ram Power as a new competitor. A company
controlled by Mr. Rule is Ram Power's largest shareholder, with
approximately 10%. This is much greater than Mr. Rule's ownership
of approximately 5% of SGP and suggests that Mr. Rule's interests
lie with Ram Power, not SGP.
On October 1, 2009, Mr. Rule renewed his effort to take control
of your Board and advance Ram Power's agenda. A company he
controls, Exploration Capital Partners 2005 Limited Partnership,
served a second and corrected requisition for a SGP shareholders'
meeting. This time, Mr. Rule wants to increase the number of
directors from six to thirteen and elect seven hand-picked nominees
to form a majority of the Board.
Mr. Rule's Nominees and Their Connections to Ram Power
Each of Mr. Rule's nominees has now or has recently had a
connection to Ram Power or one of its predecessor companies and we
believe that each nominee was chosen for his loyalty to Mr. Rule
and Ram Power's agenda. We believe that if Mr. Rule takes control
of SGP's Board, Ram Power will renew its efforts to acquire SGP at
a discount and that these seven dissident nominees, as a majority
of the Board, will facilitate this.
In summary, we believe that Mr. Rule seeks to pursue Ram Power's
agenda at the expense of the other SGP shareholders. We believe
that Mr. Rule seeks to enhance the value of his much larger
financial stake in Ram Power by acquiring SGP at a discounted value
through control of the Board and allowing Ram Power shareholders to
benefit at your expense.
Your Current Board Deserves Support
Your current Board consists of a majority of independent
directors with a strong track record of good performance and
excellent corporate governance. The Board believes that SGP has
attractive properties, knowledgeable management, a vibrant business
and a promising future. SGP has performed very well against its
peers in challenging economic times.
As you know, we have been able to secure financing and we are
actively pursuing our business plan. With the recent successful
completion of almost $11 million in equity financings and the
support of US$10 million in grants from the U.S. Department of
Energy, our overall plan for our Tier One projects is to advance at
least 50 megawatts to bankable feasibility during 2010. If we
achieve this, we believe we will be on our way to production and
long-term stable revenue.
While your Board is willing to consider any reasonable offer to
acquire SGP, we would only be interested in a transaction that
makes sense for SGP and all of its shareholders, and we intend to
continue to question any effort to be bought out at less than fair
value.
RECOMMENDATION TO SHAREHOLDERS:
The Board urges you to vote on the GREEN proxy AGAINST the
resolution to increase the size of the Board and WITHHOLD your vote
on the resolution to elect seven dissident nominees.
Regardless of the number of shares you own, you must take action
and cast your vote today by completing and returning only the GREEN
proxy.
A special shareholders' meeting of SGP has been scheduled for
10:00 a.m. on January 26, 2010 at Suite 800 - 885 West Georgia
Street, Vancouver, British Columbia, Canada. The meeting will be
held to consider the proposals to have Mr. Rule's seven hand-picked
nominees appointed to your Board. We believe these nominees are not
up to the task of leading SGP into the future. We urge you to read
the Management Circular and support the current Board and
management.
If you have any questions or need assistance in completing your
GREEN proxy, please call Laurel Hill Advisory Group at toll free
1-888-534-1149 or email at assistance@laurelhillag.com and they
will be happy to help.
Yours truly,
Gary Thompson, Chief Executive Officer, President and
Director
How to Cast Your Vote
The Management Circular and related proxy materials, including
the GREEN proxy, have been mailed to persons who were shareholders
of record as of the close of business on December 15, 2009.
Investors and security holders may obtain a free copy of these
documents on our website at www.sierrageopower.com/proxy at the
Canadian securities regulators web site www.sedar.com and by mail.
You can request the materials by contacting SGP's Investor
Relations department, Sierra Geothermal Power Corp., Suite 500 -
666 Burrard Street, Vancouver, B.C., Canada, V6C 3P6, or by
telephone: 1-800-563-5631, or by email at
info@sierrageopower.com.
SGP and its directors, executive officers and other members of
its management and employees may be deemed to be participants in
the solicitation of proxies from SGP's shareholders in connection
with the proposed acquisition. Information concerning the interests
of SGP's management who are participating in the solicitation is
set forth in the Management Circular.
If you have any questions or need assistance in completing your
GREEN proxy, please call Laurel Hill Advisory Group at toll free
1-888-534-1149 or email at assistance@laurelhillag.com and they
will be happy to help.
About Sierra Geothermal Power Corp.
Sierra Geothermal Power Corp. is a renewable energy company
focused on the exploration and development of clean, sustainable
geothermal power. It is based in Vancouver, British Columbia and
listed on the TSX Venture Exchange under the symbol SRA. Its
portfolio of geothermal projects located in Nevada and California
exceeds 365 square kilometres (90,000 acres) and has a combined
total estimated capacity of greater than 500 MW. SGP intends to
finance development by utilizing a combination of corporate equity,
joint venture partnerships and project debt, with the support of US
government grants and loan guarantees. To find out more about
Sierra Geothermal Power Corp. (TSX VENTURE: SRA) visit our website
at www.sierrageopower.com.
On behalf of the Board of Directors
Gary Thompson, Chief Executive Officer, President and
Director
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements.
Forward-looking statements are projections of events, revenues,
income, future economic performance or management's plans and
objectives for future operations. In some cases you can identify
forward-looking statements by the use of terminology such as "may",
"should", "anticipates", "believes", "expects", "intends",
"forecasts", "plans", "future", "strategy", or words of similar
meaning. Forward looking statements in this news release include
statements about SGP's belief that the dissident nominees will
facilitate the acquisition of SGP by Ram Power, Corp. at a discount
price; its belief in its plan to advance at least 50 megawatts to
bankable feasibility during 2010 and that if it achieves this it
will be on its way to production and long-term stable revenue; its
belief that the Board would be interested in a transaction that
makes sense for SGP and all of its shareholders; that the Board
intends to continue to question any effort to be bought out at less
than fair value; and that SGP intends to finance the development of
its portfolio of projects through a combination of equity and/or
joint ventures. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including
the risks inherent in our industry, the poor capital markets and
other risks identified by us in our periodic filings on SEDAR
(which can be viewed at www.sedar.com). Any of these risks could
cause our or our industry's actual results, levels of activity,
performance or achievements to be materially different from any
future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements.
While these forward-looking statements and any assumptions upon
which they are based are made in good faith and reflect our current
judgment regarding the direction of its business, actual results
will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance
suggested in this press release. Except as required by applicable
law, including the securities laws of Canada, we do not intend to
update any of the forward-looking statements to conform these
statements to actual results.
Neither the TSX Venture Exchange nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Sierra Geothermal Power Corp. Gary Thompson President
& CEO (604) 683-0332 / 1-800-563-5631 info@sierrageopower.com
Sierra Geothermal Power Corp. Anthony Srdanovic, BA Investor
Relations (604) 642-6179 asrdanovic@sierrageopower.com
www.sierrageopower.com
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