EAM Solar

M&A Activity • Jun 26, 2014

EAM Solar ASA: P31 closing conducted

EAM Solar ASA: P31 closing conducted

EAM: P31 closing conducted

26(th) of June 2014

EAM Solar ASA signed the revised and final closing agreement and executed the

transfer deed of the P31 portfolio acquisition last night. The transfer of the

shares of the acquired companies to the Company is expected to take place on

Monday the 30(th) of June after receiving the last of four bank waivers.

As a result of the confirmatory due diligence conducted after the signing of the

initial Share Purchase Agreement in December 2013, and due to subsequent events,

the final terms and conditions of the acquisition has been changed in order to

secure the same or an improved return on equity for EAM Solar ASA.

The final acquisition price for the acquired companies is adjusted from the

initial EUR 41,6m to EUR 36,8m (including net working capital). In addition EAM

will purchase net receivables towards the acquired companies from Aveleos SA for

an amount of EUR 11,5m. The purchased companies have approximately EUR 7m in

cash and EUR 10m in receivables at the closing date. EUR 11,3m of the payment

has been deferred until the end of the year pending the final outcome of the

post closing adjustments.

The determination of the final acquisition price is subject to certain post-

closing adjustments to be settled in the second half of 2014. The post-closing

purchase price adjustments are related to three subsequent events and the price

adjustments are structured to achieve the same or improved return on equity if

any of the following events should occur post closing;

1. If a change in the payment structure of the FIT contracts or an additional

taxation of Solar Power Plants, as officially proposed by the government in

Italy yesterday, should take effect, the purchase price will be reduced with

a maximum of EUR 7,5m depending on the final outcome of the law proposal.

2. If the adjusted power production performance of the power plants in 2014 are

higher or lower than the normalized expected production, the seller may

receive an additional payment of up to maximum EUR 4m, or the purchase price

may reduced by maximum EUR 4m.

3. The financing banks have withheld EUR 6,6m in undrawn loans. In the case

these loans are not released during the 2(nd) half 2014, the purchase price

will be reduced by EUR 775k. The release of the undrawn loans is subject to

receiving the Final Acceptance Certificate on the power plants, a measure

EAM starts immediately post closing. If the loans are not released the gross

interest bearing debt will be reduced accordingly. At the closing date the

gross interest bearing debt is approximately EUR 69m.

The P31 process was initiated in November 2013 and further reference is made to

previous Stock Exchange notices, financial reports for the fourth quarter 2013,

first quarter 2014 and prospectus issued in conjunction with the private

placement completed in January 2014. The P31 acquisition is a significant step

towards reaching EAM Solar's targets for growth and profitability.

EAM has until today owned four solar plants with a combined capacity of 6.6 MW

and an annual production capacity of approximately 9 GWh.  The P31 portfolio has

a combined capacity of 30 MW and an average annual electricity production

capacity of approximately 44 GWh. As a result EAM's expected annual revenues

will increase from approximately EUR 3.5 million to approximately EUR 20 million

(before changes to the FIT payment structure).

Yesterday the government of Italy issued the law decree, subject to approval in

the Parliament, proposing changes to the regulatory and financial regime of the

electricity sector in Italy. The regulatory changes will affect the revenues

received by solar PV power plants through the FIT contracts with GSE. The

proposed measures are either through a reduction in the annual FIT revenues

ranging from 17% to 25% depending on the remaining contract lifetime and a 4-

year prolongment of the contract period, or through a voluntary 8% annual

reduction in the FIT.

As previously communicated EAM Solar consider the regulatory changes to have a

limited effect for the existing power plants in the EAM portfolio due to their

financial structure. Furthermore the possible Italian tariff changes to

contribute positively to the solar power plant transaction market and open

further strategic opportunities in Italy.

For information, please contact:

Viktor E Jakobsen, Executive Director, phone +47 9161 1006, viktor@eamsolar.no

Audun W. Iversen, CEO, phone +47 916 16 250, audun@eamsolar.no

About EAM Solar:

EAM Solar ASA is a utility company that acquires and operates solar power

plants. Following the P31 acquisition, the Company owns 35 solar PV power plants

in Italy with a capacity of 37MW. The plants are operating under long-term sales

contracts. EAM Solar acquires power plants that are commissioned, connected to

the grid and in power production at the time of financial close with the

geographical focus on Europe.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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