Reservoir Capital Corp. (CSE: REO) (“REO” or the “Company“) is pleased to announce that, through its wholly-owned subsidiary, Kainji Power Holding Limited (“KPHL“), it has completed the previously announced acquisition of Olocorp Nigeria Ltd. (“OLOCORP”) pursuant to a share sale and purchase agreement and amending agreement (the “Agreements”) among the Company, OLOCORP, Clara Olo and OLOCORP’s major shareholder Eric Olo (“EOLO”).
Pursuant to the Agreements, REO acquired the remaining 40% equity stake in OLOCORP in exchange for REO issuing, among other things, a total of 38 million new REO common shares (“REO Shares”), as more particularly described below (the “Transaction”).
About Olocorp Nigeria Limited
OLOCORP is a limited liability company registered in Nigeria in 2013 for the main purpose of holding shares in North-South Power Company Ltd (“NSP”), and currently owns 7,297,297 NSP shares. The consummation of the Transaction makes OLOCORP a wholly-owned subsidiary and will add 3.7MW of net operating hydropower capacity to the Company.
Details of the Transaction
Pursuant to the Agreements, REO acquired the remaining 40% equity stake in OLOCORP through KPHL in exchange for consideration of $2.66 million in the form of (i) 37,000,000 REO Shares issued to certain designated beneficiaries of OLOCORP (the “Designated Beneficiaries”) at a deemed price of $0.07 per REO Share; and (ii) an aggregate of 1,000,000 bonus REO Shares to the Designated Beneficiaries at a deemed price of $0.07 per REO Share for the timely consummation of this Transaction giving 100% ownership and control of OLOCORP to REO & KPHL and for holding 1 OLOCORP share in trust for REO.
Also pursuant to the Agreements, in partial satisfaction of an outstanding debt of the Company in the amount of $530,000 (the “Debt”), as evidenced by a convertible loan note issued to EOLO, the Company entered into a debt settlement agreement with EOLO to settle the Debt, pursuant to which the Company issued 8,000,000 REO Shares to EOLO at a deemed price of $0.06625 per REO Share (the “Debt Settlement”). The remainder of the Debt was satisfied through the issuance of a promissory note by KPHL to EOLO in the amount of $200,000.
Immediately prior to the Transaction, REO had 529,347,377 REO Shares outstanding. Following the completion of the Transaction and Debt Settlement, REO has 575,347,377 REO Shares outstanding. The REO Shares issued to the Designated Beneficiaries and EOLO under the Transaction and Debt Settlement are subject to a minimum four-month hold period and restrictions on transfer under Canadian securities law.
In addition to the Transaction, EOLO’s last remaining conditional cash payment of approximately $245,000 (US$180,000) from an earlier agreement (see News Release December 31, 2019) has been replaced by a promissory note of $100,000.