Sierra Geothermal and Ram Power Enter Into Letter of Intent
May 31 2010 - 9:47AM
Marketwired
Sierra Geothermal Power Corp. (TSX VENTURE: SRA) ("Sierra") and Ram
Power Corp. (TSX: RPG) ("Ram Power") are pleased to announce that
they have entered into a non-binding letter of intent in relation
to the potential acquisition by Ram Power of all of the outstanding
common shares of Sierra.
The letter of intent contemplates the acquisition by Ram Power
of all of Sierra's outstanding common shares by way of a share
exchange whereby holders of outstanding Sierra shares would receive
1 common share of Ram Power for every 12 common shares of Sierra.
All outstanding options and warrants to purchase Sierra shares will
be exchanged under the transaction for options and warrants to
purchase common shares of Ram Power in accordance with the exchange
ratio. The transaction will result in the issuance of approximately
11.125 million common shares of Ram Power to shareholders of
Sierra.
Based on the exchange ratio and Ram Power's May 28, 2010 closing
share price of $2.56, the implied offer price of $0.213 per Sierra
share represents an 18.5% premium to its May 28, 2010 closing share
price of $0.18 and a premium of 19.9% to Sierra's 20-day volume
weighted average price of $0.178.
The benefits of the transaction include:
-- Allows shareholders of Sierra to recognize an attractive premium to the
existing Sierra share price, while obtaining an interest in Ram Power's
broader portfolio of operating, in-construction, and development
geothermal assets.
-- Shareholders of Sierra will become shareholders of Ram Power, with its
experienced management team and strong balance sheet;
-- Increases Ram Power's footprint in Nevada, one of the premier regions
for geothermal development in the United States;
-- Potential for synergistic development of a power cluster in Esmeralda
County, Nevada as Ram Power's Clayton Valley land positions are
contiguous to Sierra's Paymaster District projects: Alum, Silver Peak
and Pearl;
-- Acquired projects improve the ability of Ram Power to deliver additional
power under its existing power purchase agreement with NV Energy;
-- Continuance of the consolidation process underway in the geothermal
industry and the enhancement of Ram Power's position as a market leader
amongst independent geothermal energy companies.
The parties expect to enter into definitive agreements in
relation to the transaction towards the end of June 2010, subject
to negotiation of mutually satisfactory terms, completion of
confirmatory due diligence and the receipt of lock-up commitments
in favour of the transaction from Sierra's largest shareholders. In
addition, the closing of any transaction will be conditional upon
receipt of any required regulatory and shareholder approvals. Under
the letter of intent, Ram Power and Sierra have agreed to negotiate
exclusively in order to complete confirmatory due diligence and
negotiate definitive agreements.
Gary Thompson, SGP's President, Chief Executive Officer and
Executive Director stated, "We are pleased that our formal
strategic process led by Jacob Securities Inc. has resulted in a
transformative transaction for Sierra shareholders. We believe that
Sierra shareholders will benefit from this transaction by merging
into a well capitalized geothermal company such as Ram Power. The
transaction has the full support of the Sierra Board of Directors,
Special Committee, and Management who will be working closely with
Ram Power over the coming weeks to finalize and execute definitive
agreements."
Hezy Ram, Chief Executive Officer for Ram Power stated, "We are
very pleased about the letter of intent with Sierra. This
transaction comes as a continuation of our strategy to create a
renewable energy company of scale, with the skilled management and
capital in place to execute on our projects."
ABOUT RAM POWER CORP.
Ram Power is a renewable energy company based in Reno, Nevada,
engaged in the business of acquiring, exploring, developing, and
operating geothermal properties and has interest in geothermal
projects in the United States, Canada, and Latin America.
ABOUT SIERRA GEOTHERMAL POWER CORP.
Sierra is a Vancouver-based geothermal energy company focused on
the exploration and development of clean, sustainable power in
Western North America. Sierra has 100% control over its 120,000
acre portfolio of geothermal properties in Nevada, California and
British Columbia. Sierra's projects have a combined total estimated
capacity of almost 400MW.
On behalf of the Board of Directors
Gary Thompson, P.Geo, President, Chief Executive Officer 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 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 press release include statements
about the proposed transaction, the expected date of entering into
definitive agreements and the benefits the transaction might bring
to Ram Power, Sierra and their respective shareholders. While these
forward-looking statements and any assumptions upon which they are
based are made in good faith and reflect the current judgment of
management at both Ram Power and Sierra, actual results will almost
always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other forward-looking information
suggested in this press release. These statements are only
predictions and involve known and unknown risks, uncertainties and
other factors, including the risks that the companies are unable to
negotiate a mutually acceptable agreement, the risk that they
cannot obtain the consents that may be required in order to
consummate the transaction, the risk of adverse changes to either
company or the industry in which they operate, as well as the
general business risks described in the periodic disclosure
documents filed by Ram Power and Sierra on SEDAR, copies of which
are available at www.sedar.com. Any of these risks could cause
actual results or achievements to be materially different from
those that are expressed or implied by the forward-looking
statements contained in this press release. Except as required by
applicable law, neither of Ram Power or Sierra intends to update
any of the forward-looking statements to conform these statements
to actual results.
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.
Contacts: Sierra Geothermal Power Corp. Anthony Srdanovic
Investor Relations (604) 683-0332 x 115
asrdanovic@sierrageopower.com www.sierrageopower.com Ram Power
Corp. Steven Scott Director of Investor Relations +775-398-3711
sscott@ram-power.com www.ram-power.com
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