VANCOUVER, March 7 /PRNewswire-FirstCall/ - Magma Energy Corp (TSX:MXY) and Plutonic Power Corporation (TSX:PCC) today announced that they have entered into an arrangement agreement (the "Arrangement Agreement") to merge and create Alterra Power Corp. ("Alterra"), a leading renewable power producer, with a post-deal market capitalization of approximately $575 million.
Under the terms of the Arrangement Agreement, each Plutonic shareholder will receive 2.38 shares of Magma for each Plutonic share held, and Magma will change its name to Alterra. The exchange ratio represents a premium to Plutonic shareholders of 32% over Plutonic's 20 day weighted average share price on the Toronto Stock Exchange. At the conclusion of the merger there will be 470 million shares of Alterra issued and outstanding and 487 million shares on a fully diluted basis.
Merged Entity Highlights
- Solid base of producing assets in three key renewable energy sectors: Geothermal, hydro and wind. Six operating plants in three locations: two geothermal plants in Iceland and one in Nevada; two hydro plants in British Columbia; one wind farm in British Columbia; and an option on one solar project in Ontario. - Increased production capacity: 2011 production capacity of 198 megawatts generating 1,340 gigawatt hours/year from Magma's geothermal assets and 168 megawatts generating 460 gigawatt hours/year from Plutonic's hydro and wind assets. - Significant immediate increase in cash flow generation to both companies. - Strong growth platform in geothermal, wind and hydro sectors: Near-term growth in Iceland and Nevada geothermal production; near-term growth prospects in British Columbia hydro and wind assets and Ontario solar assets; significant large long-term growth prospects in Chile, Peru, Nevada and Iceland geothermal assets and British Columbia hydro assets. - Shared commitment to social responsibility: Both Magma and Plutonic recognize a commitment to social responsibility and sustainable development of renewable energy projects. The shared values and experience in this area will be a competitive advantage in creating long term value for shareholders and the communities in which Alterra operates. - Complementary management teams: Magma's and Plutonic's highly regarded management teams blend renewable energy exploration, development, financing and operations skill sets. - Significant administration synergies: Estimated at $2.2 million per year. - Financial support: Magma to provide short term financial support to Plutonic by subscribing for a $10 million convertible debenture.