Run of River Power Inc. Announces Letter of Intent for the Sale of Run of River Power Inc. and Sale of Rockford Energy Corporation

VANCOUVER, April 11, 2014 /CNW/ - Run of River Power Inc. ("ROR Power" or the "Company") (TSX-V: ROR) announces that it has entered into a non-binding letter of intent (the "Letter of Intent") with Concord Green Energy Inc. ("Concord") and its wholly-owned subsidiary ROR Acquisition Ltd. ("AcquireCo"), and 0999130 B.C. Ltd. ("REC Acquirer") with respect to a proposed plan of arrangement under section 288 of the Business Corporations Act (British Columbia) among ROR Power, its wholly-owned subsidiary Rockford Energy Corporation ("REC"), Concord, AcquireCo, REC Acquirer and the holders (the "Shareholders") of the common shares (each, a "ROR Share") in the capital of ROR Power (collectively, the "Arrangement").

The Letter of Intent is non-binding and sets out the proposed terms of the Arrangement based on the current understanding of the parties.  The parties are in the process of negotiating a definitive arrangement agreement (the "Arrangement Agreement") which, if entered into, is expected to set out the terms and conditions on which the Arrangement will be completed.

The Letter of Intent provides that the proposed Arrangement is intended to effect: (i) the sale by ROR Power of all of the issued and outstanding common shares in the capital of REC (each, a "REC Share") and of the outstanding shareholders loans advanced by ROR to REC (collectively, the "REC Loans") to REC Acquirer (the "REC Disposition") such that REC, which owns the Brandywine Creek Project, will become a wholly-owned subsidiary of REC Acquirer; (ii) the sale by the Shareholders to AcquireCo of all of the issued and outstanding ROR Shares (the "ROR Disposition") and the amalgamation of AcquireCo and ROR Power (the "Amalgamation") such that the amalgamated company will become a wholly-owned subsidiary of Concord; (iii) the repayment of certain liabilities of ROR Power which are incurred on or before closing of the Arrangement (the "Debt Repayment"); and (iv) the distribution of cash consideration (the "ROR Consideration") to the Shareholders for their ROR Shares. 

In addition, the Letter of Intent proposes that in connection with the proposed Arrangement, AcquireCo will advance $1,250,000 (the "Advance") to ROR which, together with the cash portion of the $8,040,000 (the "REC Consideration") to be paid by REC Acquirer pursuant to the REC Disposition and any cash ROR Power has on closing of the Arrangement (the "Closing"), will constitute the funds available to the amalgamated company (the "Available Funds") from which the Debt Repayment will be completed and from which the ROR Consideration will be paid to the Shareholders.  The REC Consideration is expected to be paid partly in cash and partly by the tendering of certain debentures and convertible debentures of ROR that are outstanding, and Concord is expected to not require the repayment of certain amounts owing to Concord prior to Closing.  The aggregate ROR Consideration is expected to be the amount resulting from the deduction of the payments made in respect of ROR liabilities incurred on or before the Closing date from the Available Funds, and is expected to be distributed to the Shareholders on a pro rata basis following a post-Closing holdback period of approximately 90 days.  The aggregate amount of the ROR liabilities to be deducted from the Available Funds prior to distribution of the ROR Consideration is not known at this time.

If an Arrangement Agreement is entered into, the Closing of the Arrangement will remain subject to a number of conditions including, among other things: receipt of the requisite approval of the Shareholders including approval of the majority of the disinterested Shareholders pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, approval of the TSX Venture Exchange, approval of the Supreme Court of British Columbia, and dissent rights not being exercised with respect to more than 5% of the issued and outstanding ROR Shares in connection with Shareholder approval of the Arrangement.

Also, if an Arrangement Agreement is entered into, ROR Power intends to call a meeting of the Shareholders to consider approval of the Arrangement, and in connection with such a meeting intends to obtain a fairness opinion with respect to the Arrangement and to provide Shareholders with an information circular which includes additional disclosure regarding the Arrangement.

Concord and AcquireCo are both private British Columbia corporations that have an arm's length relationship with ROR Power.  REC Acquirer is a private British Columbia company of which is beneficially owned by certain holders of outstanding debentures and convertible debentures of ROR Power. Peter Zell, a director and significant shareholder of ROR Power, and Brett Robinson, a director of ROR Power, are directors of REC Acquirer.  Information in this news release concerning the ownership and directors of REC Acquirer has been provided to ROR Power by REC Acquirer.

Following Closing, subject to the requisite Shareholder and regulatory approvals being obtained, the ROR Shares are expected to be voluntarily de-listed from the TSX Venture Exchange and ROR Power is expected to cease to be a reporting issuer in British Columbia and Alberta.

About Run of River Power Inc.

ROR Power develops renewable, sustainable energy through its portfolio of clean energy projects. The company helps diversify BC's energy mix by providing a cleaner way to generate power and increasing the security of BC's energy supply. ROR Power operates an Eco Logo© certified hydroelectric power generation station at Brandywine Creek, near Whistler, BC that provides green power for about 4,000 homes.

Disclaimer Regarding Forward Looking Information

Certain information included in this press release constitutes forward-looking information under applicable securities legislation.  Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook, or statements that certain events or conditions "may" occur. Forward-looking information in this press release includes, but is not limited to, statements regarding the expectations of management of ROR Power regarding: (i) the Arrangement; (ii) completion of the Arrangement; (iii) entry into the Arrangement Agreement; (iv) the intended results of the Arrangement; (v) the conditions to completion of the Arrangement; (vi) the calculation of and timing for payment of the ROR Consideration to the Shareholders; (vii) the Shareholders' meeting in connection with the Arrangement; (viii) receipt of a fairness opinion in connection with the Arrangement; (ix) the preparation and delivery of an information circular in connection with a Shareholders meeting to consider the Arrangement; and * the proposed de-listing of the ROR Shares and the proposed ceasing to be a reporting issuer of ROR Power. 

Although ROR Power believes that the expectations reflected in the forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because ROR Power can give no assurance that such expectations will prove to be correct.  Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, the risks that: (1) the Arrangement may not be completed for any reason whatsoever, including that the requisite Shareholder, court and/or regulatory approval of the Arrangement may not be obtained or that AcquireCo and/or the REC Acquirer may not have the necessary funds to make the Advance and the REC Consideration available to ROR Power; (2) an Arrangement Agreement may never be entered into for any reason whatsoever, including that the parties may not agree on the definitive terms; (3) the Arrangement, if completed, may not have the intended effect as set out in this news release; (4) the aggregate amount of the ROR liabilities to be deducted from the Available Funds may be significant, and the resulting ROR Consideration, if any, may be nominal; (5) the meeting of Shareholders to consider the Arrangement may not occur; (6) a fairness opinion may not be obtained, or if obtained, may not provide a favourable opinion as to the fairness of the Arrangement; (7) the information circular and other materials for the meeting of Shareholders may not be prepared or delivered to Shareholders as expected; (8) the ROR Shares may not be de-listed and ROR may not cease to be a reporting issuer following Closing for any reason whatsoever, and (9) such other risks and uncertainties beyond the control of ROR Power. 

Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. The forward-looking information contained in this press release is made as of the date hereof and ROR Power undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.

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.

SOURCE: Run of River Power Inc.

Richard W. Hopp, President and CEO, Tel: [phone], [email protected], www.runofriverpower.com