BM HoldCo holds a 100 percent interest in NGP Blue Mountain I LLC ("NGP 1") which in turn owns all of the project assets including geothermal leases, operating permits and licenses, the power plant, wellfield and all other physical or contractual assets of the Blue Mountain Project.
On closing of the Agreement, EIG will accept the transfer of ownership of BM HoldCo to EIG's Blue Mountain Power, LLC in full satisfaction of the then outstanding principal, accrued unpaid interest and any other cash or fee obligations owing by BM HoldCo under its loan agreement with EIG. In addition, EIG's cash settled options shall terminate.
NGP will receive $500,000 in satisfaction of a current account receivable from BM HoldCo.
As at December 31, 2012, BM HoldCo owed approximately $97.4 million to EIG. The project is currently in default on the subordinated EIG debt, formal notice of such having been delivered by EIG on January 11, 2013. NGP 1, the BM HoldCo subsidiary which will also be transferred to EIG on closing of the Agreement, holds a senior debt facility with approximately $84.2 million owing as at December 31, 2012, which is fully secured by the project assets.
On closing of the Agreement, both the mezzanine and senior debt obligations will be removed from NGP.
NGP will continue as project operator of the Faulkner 1 geothermal power plant and will provide management and administrative services through its operating subsidiary, Nevada Geothermal Operating Company LLC ("OPCO") and will receive its normal operating fee under its existing operating agreement, during a cooperative transition period of up to twelve months from the BM HoldCo equity transfer date.
The ownership transfer of BM HoldCo is subject to approval by the Federal Energy Review Commission ("FERC"), approval of a 2013 project budget by the senior lender, approval by certain lease holders and final approval by the TSX-V Exchange.
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