UGE Announces Clarification of Loan Agreement
March 16, 2016 - TORONTO, ONTARIO - UGE International Ltd. (the "Company" or "UGE") (www.ugei.com) (TSX VENTURE:UG)(OTCQB:UGEIF), a global leader in distributed renewable energy solutions, wishes to clarify the terms of the loan agreement entered into with the Bank of China (the "Bank of China Loan") as announced on January 26, 2016.
The Bank of China Loan is for a one-year term and carries an interest rate of 5.22% per annum, based on industry rates which are subject to change, with interest payments made on a quarterly basis. The Bank of China Loan is secured by the Company's assets in China and personally guaranteed by two related parties to the Company. In the event that extensions or refinancing of the loan is required, one of the related parties has guaranteed repayment of the Bank of China loan, if necessary, to facilitate such extensions or refinancing. If such a repayment by a related party is made, the Company will be indebted to the related party and such indebtedness would be unsecured and interest free, maturing on November 17, 2018.
The loan is for general working capital purposes. Proceeds from the Bank of China Loan were not used to finalize the acquisition of Endura Energy Project Corp. (the "Endura Acquisition") as was previously announced. Rather, the Endura Acquisition closed on a promissory note from the Company which is secured by a letter of credit with the Silicon Valley Bank, funded in full by cash from the proceeds of a related party loan.