BURNABY, British Columbia, April 3, 2012 /PRNewswire/ --
Day4 Energy Inc. (TSX: DFE), a leading global provider of solar photovoltaic (PV) products and solutions, today reported that it has completed its previously announced sale of its subsidiary Day4 ecoTec GmbH. The sale was completed on March 31, 2012 to a company controlled by a director of Day4.
Under the terms of the transaction the acquirer will acquire 100% of issued and outstanding shares of Day4 ecoTec from Day4 for a total consideration of CAD $100 and will cause Day4 ecoTec to issue a secured debenture to Day4 in the principal amount of €4.5 million, which represents net amounts advanced by Day4 to Day4 ecoTec and the two parties have agreed is the amount owingon the closing date. The secured debenture carries an interest coupon equal to the main refinancing operation (fixed rate) of the European Central Bank plus 5% per annum, to a maximum of 7.5% per annum for the first five years and 8% per annum thereafter. The debenture will be secured against the assets of Day4 ecoTec and the security will rank behind any existing bank security of Day4 ecoTec. The principal portion of the debenture is to be paid to Day4 by quarterly instalments in the amount of a specified percentage of Day4 ecoTec's cash receipts in a quarter, to a maximum of €200,000 per quarter. Interest will be payable quarterly in arrears. The secured debenture will mature on March 31, 2022.
The sale is expected to significantly reduce Day4's monthly operating costs as well as its long and short term debt. As a result of the transaction, Day4's staff will be reduced from 132 employees to 50 employees.
In connection with the sale, certain long-term relationship agreements and non-competition agreements were terminated which agreements were initially entered into at the time when Day4 acquired Day4 ecoTec. The long term relationship agreement previously included restrictions on the manner and timing of any dispositions of Day4 shares by the previous owners of Day4 ecoTec and provided that Day4 would appoint two nominees of the previous owner to the board of directors of Day4.
This sale transaction is exempt from the shareholder and valuation requirements of "related party" transactions under applicable securities legislation as Day4 is considered to be in financial hardship and the transaction is designed to improve Day4's financial position. The transaction was unanimously approved by the directors of the Company, excluding the related director.
About Day4 Energy
Day4 Energy Inc. is a Canadian company dedicated to providing high performance photovoltaic (PV) solutions for residential, commercial and utility scale installations. By fundamentally improving on the design and assembly of solar cells and modules, the Company produces unique PV panels of high power density, increased lifetime and uncompromised aesthetic appearance. Day4 Energy partners with international technology leaders to develop and deliver IEC- and UL-certified solar products to customers around the world. Day4 Energy is listed on the Toronto Stock Exchange under the symbol "DFE". For more information, please visit http://www.day4energy.com.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements include, among other things, statements relating to our expectations regarding our revenues, expenses, cash flows, operating performance and future profitability and our expectations regarding monthly operating expenses and short and long term debt. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target", and similar words suggesting future events or future performance.
The forward-looking statements contained in this news release are based on assumptions, which include, but are not limited to the minimum base of licensed manufacturing capabilities required for revenues to become sufficient to cover the costs of the Company's operations; the interest of third parties in manufacturing Day4's products under license; our ability to meet and manage demand for our products; achieving increased PV cell and PV module efficiencies; expanding our existing product line; developing new markets for our products and securing necessary certifications in such markets; building the Day4 brand, attracting customers, and developing and maintaining customer and supplier relationships; continuing our strong relationships with our suppliers; effectively managing foreign exchange risks; effectively managing credit risks of customers and other counterparties; protecting our intellectual property rights and not infringing on the intellectual property rights of third parties; timely processing by certification agencies for new products; the continued existence of government incentives for the generation of electricity using solar power; and complying with applicable governmental regulations and standards.
Such forward-looking statements are subject to risks, uncertainties and other factors, including those listed in our Annual Information Form filed with Canadian securities regulatory authorities, many of which are beyond our control and each of which contributes to the possibility that our forward-looking statements will not occur or that actual results, performance or achievements may differ materially from those expressed or implied by such statements. These risks, uncertainties and other factors include, but are not limited to risks relating to negotiating and closing the transaction with Ever Energy Ltd., risks related to newly acquired businesses, dilution risk, our financial strength and our ability to effectively manage our cash flow; there may be a lower than expected interest from third parties in manufacturing Day4's products under license; the absence of confirmed PV cell suppliers could impact our ability to secure third party licensees of our technology with PV cells incorporating Day4's technology; the non-production of Day4 PV modules until licensed manufacturers are established may damage our sales channels, our brand and our reputation; the possibility that we may be subject to litigation by our suppliers or customers; warranty claims; risks relating to the protection of our intellectual property and intellectual property infringement claims by third parties; our reliance on a limited number of suppliers; government subsidies and economic incentives for PV power could be reduced or eliminated; the financial strength of our competitors; competition from other forms of renewable energy; our ability to manage growth effectively; our ability to open up new markets for our products; demand for PV modules may reduce; technological advances from competitors that may render our products uneconomic or obsolete; the impact of general economic, market or business conditions; currency market fluctuations; and other factors, many of which are beyond our control and any risks described in the management information circular to be prepared in connection with the Ever Energy Co. Ltd. transaction.
The forward-looking statements made in this news release relate only to events or information as of the date indicated above. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
For further information:
George Rubin
President and CEO
Day4 Energy Inc.
+1-604-296-0422
Share this article