For Immediate Release
November 24, 2005
Tonbridge Power executes letter of intent to increase shareholding interest by 35% in MATL to 100%. Tonbridge Power Inc. (“TBZ”) listed on the TSX Venture Exchange, controlling shareholder of the Montana Alberta Tie Ltd. (“MATL”) transmission line project to interconnect the electricity markets of Alberta and the US through a 300 MW transmission line to be operational in 2007, is pleased to announce that a letter of intent has been executed confirming the intent to purchase from Rocky Mountain Power Limited (“RMP”) and LECTRIX Limited the remaining 35% interest in MATL that Tonbridge Power Inc. currently does not own. This purchase will raise TBZ’s interest to 100%. The letter of intent contemplates that TBZ will issue 35,929,000 new TBZ shares in exchange for the remaining 10,500,000 MATL common shares owned by the vendors Rocky Mountain Power and LECTRIX. Rocky Mountain Power is owned equally by Lorry Wilson, Jose Fernandez and Joe Novecosky, three officers of MATL who are insiders of TBZ. Lectrix is owned by Reynold Roeder, a director of MATL and insider of TBZ, and two other individuals who are not insiders of TBZ. Specifically, the letter of intent identifies the exchange of 17,964,500 TBZ shares to the shareholders of RMP for 5,250,000 MATL shares and the exchange of 17.964,500 TBZ shares to the shareholders of LECTRIX for 5,250,000 MATL shares. At a value of 33 cents per share, this transaction is valued at $11.833 million. This transaction will be subject to regulatory approval, the approval of the Tonbridge Power Inc. board and the approval of the shareholders of both RMP and LECTRIX, and may require the approval of TBZ shareholders. We anticipate that the new TBZ shares will be subject to the equivalent escrow requirements that apply to the original TBZ shareholders under TSX Venture rules. The purchase of 35% of MATL will be accomplished for 22.4% of TBZ calculated on a post transaction basis owned equally between the six vendors. This transaction proposes the following material considerations: • • • MATL will still exist as the operating entity. Current structure of MATL will continue and execution of policy will continue under same management. Current MATL CEO, CFO, and COO positions to remain unchanged. TBZ will issue options to Lorry Wilson, Joe Novecosky, Jose Fernandez and Reynold Roeder in proportion to similar option grants as other MATL or TBZ executives acting in such capacity,(not as directors). Individuals must qualify under the terms of the TBZ option agreement and be approved by the TSX. TBZ will propose one representative of the MATL / LECTRIX shareholders to the board of directors. As a commercial incentive, the vendors shall be entitled to earn a contingent consideration as follows: o 2,000,000 common TBZ shares upon MATL’s issuance of a valid “notice to proceed” to construction, by or before, August 1, 2006. o 2,000,000 common TBZ shares upon the transmission line being completed and available to be energized for full commercial operation by March 1, 2007.
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2,000,000 common TBZ shares issued if the final EPC cost of the transmission line comes in within +/ - 5% of the board approved EPC budget. This consideration will be protected from dilution in the event of stock splits, consolidations or stock dividends. The vendors agree to provide their proxy to the president of Tonbridge Power Inc. on matters of board selection and liquidity events involving the company as approved by the board until the transmission line is commissioned for service. o
At the conclusion of the discussions surrounding this agreement Mr. Johan van t Hof commented, “This is a win–win transaction. The investors benefit from an accretive purchase of valuable assets as well as the provision of further alignment between the operating management and the public company. We see this move as enhancing TBZ’s value to investors in the long run.” Tonbridge Power Inc. is a Toronto-based investor in power projects, whose principle asset is a controlling interest in Montana Alberta Tie Ltd. Shares of the Company became publicly listed on the TSX Venture Exchange on July 7, 2005 and are traded under the symbol “TBZ”. Should you wish to receive company news via email please email info@tonbridgepower.com and specify “company news”. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. For Further information: Tonbridge Power Inc., www.tonbridgepower.com Johan van’t Hof, Chief Executive Officer, Tel: (416) 850-2150, Email: jvanthof@tonbridgecorp.com Robert van Beers, Chief Operating Officer, Tel: (416) 850-2150, Email: rvanbeers@tonbridgecorp.com Brisco Capital Partners Corp., Graeme A. Dick, Partner, Tel: (403) 313-9663, Email: graeme@briscocapital.com