Water Capital Inc. announces the acquisition of Schneider Power Inc.



    TORONTO, July 28 /CNW/ - Water Capital Inc. (the "Corporation") announced
today, further to its announcement of March 12, 2008, further details
concerning its agreement to acquire all of the issued and outstanding shares
of Schneider Power Inc. ("Schneider Power"). The acquisition will be the
Corporation's qualifying transaction (the "Qualifying Transaction") pursuant
to the policies of the TSX Venture Exchange Inc. (the "Exchange"). Upon
issuance by the Exchange of the Final Exchange Bulletin approving the
transaction, the Corporation will be a Tier 2 issuer whose shares will be
listed for trading on the Exchange.

    About Schneider Power
    ---------------------
    Schneider Power was incorporated pursuant to the provisions of the
Business Corporations Act (Ontario) (the "OBCA") on April 14, 2004 and is a
Canadian-based independent power producer and developer of renewable energy
projects and provider of related services. Schneider Power's strategy focuses
on growth areas in distributed renewable power generation, carbon dioxide
reduction and energy conservation. Schneider Power has 1.6 MW of wind power
capacity in operation, 36.5 MW of advanced-stage wind power projects, 26.5 MW
of which with long-term power purchase agreements, and 150 MW of bid-ready or
tender-ready and solar power projects. In addition, Schneider Power has in
excess of 1,000 MW of pipeline exploratory wind and solar power projects.
    Schneider Power's advanced-stage projects, namely, the Providence Bay
Expansion Project, Arthur Wind Farm Project, Innisfil Wind Farm Project and
Trout Creek Wind Farm Project, represent 36.5 MW of potential wind power
capacity, and are variously scheduled to commence construction in 2008 or
2009.
    The acquisition of Schneider Power by the Corporation will provide
Schneider Power with a vehicle to become a public issuer on the Exchange. Each
shareholder of Schneider Power will receive shares in the capital of the
Corporation in exchange for shares held by them in Schneider Power.

    About Water Capital
    -------------------
    The Corporation was incorporated pursuant to the provisions of the OBCA
on July 8, 2005 and is classified as a capital pool company pursuant to the
policies of the Exchange. The Corporation's business has been restricted to
the identification and evaluation of potential acquisitions or interests that
could lead to the completion of its Qualifying Transaction under the
Exchange's CPC policy.
    The Corporation completed an initial private placement of
5,000,000 shares on October 31, 2005 at $0.10 per share for gross proceeds of
$500,000 and a further private placement of 5,000,000 shares on November 29,
2005 at $0.20 per share for gross proceeds of $1,000,000.
    The Corporation completed its initial public offering of 2,500,000 shares
on April 27, 2006 at price of $0.20 per share for gross proceeds to the
Corporation of $500,000. The shares were listed on the Exchange with the
symbol WCP.P on May 3, 2006.

    The Qualifying Transaction
    --------------------------
    The Corporation and Schneider Power entered into an Acquisition Agreement
dated July 15,2008. The Acquisition Agreement provides that:

    
    (a) the Corporation shall amend its articles so that the issued and
        outstanding shares of the Corporation are consolidated on the basis
        of one new share for two existing shares;

    (b) Schneider Power will complete a three-cornered amalgamation with
        Water Capital Amalco Inc. ("Amalco"), a newly-formed, wholly-owned
        subsidiary of Water Capital, pursuant to which Schneider Power
        shareholders will receive one post-consolidation Resulting Issuer
        Share for every Schneider Power common share previously held;

    (c) Corporation and Amalco shall amalgamate and be continued as one
        company with the name "Schneider Power Inc." (the "Resulting
        Issuer"); and

    (d) Schneider options, warrants, offering warrants and broker warrants
        will enable the holders thereof to acquire Resulting Issuer Shares
        upon exercise of their respective options or warrants.
    

    Concurrently with the completion of the Qualifying Transaction, Schneider
Power shall complete an offering (the "Offering") of a minimum of
2,000,000 units (the "Minimum Offering") and up to 4,000,000 units (the
"Maximum Offering") at a price of $0.50 per unit. Each unit consists of one
offering share and one-half warrant. Each offering warrant entitles the holder
thereof to purchase one common share of the Resulting Issuer at a price of
$0.75 per share at any time within two years following the completion of the
Qualifying Transaction. D&D Securities Company ("D&D") has been retained by
Schneider Power to act as agent with respect to the Offering. As compensation
for acting as agent, D&D is entitled to a cash commission of 7% of the gross
proceeds raised pursuant to the Offering and to be granted broker's warrants
equivalent to 7% of the number of units sold pursuant to the Offering. Each
broker's warrant will entitle the agent to acquire one unit at an exercise
price of $0.50.
    It is anticipated that the Qualifying Transaction will be completed
during August, 2008.
    Following the Qualifying Transaction Closing, the following securities
will be outstanding:

    
    -------------------------------------------------------------------------
                                                        Minimum      Maximum
                                                       Offering     Offering
    -------------------------------------------------------------------------
    Resulting Issuer Shares                          56,634,599   58,634,599
    -------------------------------------------------------------------------
    Resulting Issuer Options
    -------------------------------------------------------------------------
      CPC Incentive Options                             625,000      625,000
    -------------------------------------------------------------------------
      Schneider Options                               1,426,363    1,426,363
    -------------------------------------------------------------------------
      Total:                                          2,051,363    2,051,363
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Resulting Issuer Warrants
    -------------------------------------------------------------------------
      Broker Warrants                                   210,000      420,000
    -------------------------------------------------------------------------
      Offering Warrants                               1,000,000    2,000,000
    -------------------------------------------------------------------------
      Schneider Warrants                              9,877,428    9,877,428
    -------------------------------------------------------------------------
      Total:                                         11,087,428   12,297,428
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total                                            69,773,390   72,983,390
    -------------------------------------------------------------------------
    

    In addition, it is intended that the Resulting Issuer will grant options
to acquire 1,670,000 Resulting Issuer shares to the directors, officers,
employees and consultants of the Resulting Issuer.
    On a non-diluted basis, following the Qualifying Transaction Closing, the
former Schneider Power shareholders will hold 50,259,599 (88.7%) of the
outstanding Resulting Issuer Shares and the former Corporation shareholders
will hold 6,375,000 (11.3%) of such Resulting Issuer Shares if there is no
Offering and 52,259,599 (89.1%) and 6,375,000 (10.9%), respectively, in the
case of the Maximum Offering.
    Since the transaction is arms-length, the Corporation is not required to
obtain shareholder approval. The Corporation has prepared a filing statement
pursuant to Exchange policies containing a full disclosure regarding Schneider
Power and the transaction. This filing statement is accessible on SEDAR
(www.sedar.com) by viewing the Corporation's public documents.

    Selected Pro Forma Consolidated Financial Information
    -----------------------------------------------------
    The following amounts are based on the interim unaudited financial
statements of the Corporation for the three months ended February 29, 2008 and
the interim unaudited financial statements of Schneider Power for the three
months ended March 31, 2008 after giving effect to the completion of the
Qualifying Transaction.

    
    -------------------------------------------------------------------------
                                                        Minimum      Maximum
                                                       Offering     Offering
    -------------------------------------------------------------------------
    Current Assets                                   $4,051,563   $4,891,563
    -------------------------------------------------------------------------
    Total Assets                                    $10,796,171  $11,636,171
    -------------------------------------------------------------------------
    Current Liabilities                              $2,008,376   $2,008,376
    -------------------------------------------------------------------------
    Total Liabilities                                $4,603,790   $4,603,790
    -------------------------------------------------------------------------
    

    Pro Forma Consolidated Working Capital Summary
    ----------------------------------------------
    The Corporation and Schneider Power will have $2,043,187 in pro forma
working capital in case of the Minimum Offering and $2,883,187 in pro forma
working capital in case of the Maximum Offering based on the interim unaudited
financial statements of the Corporation for the three months ended February
29, 2008 and the interim unaudited financial statements of Schneider Power for
the three months ended March 31, 2008 after giving effect to the completion of
the Qualifying Transaction. Of this amount, $1,875,437 will be from the
Corporation and $167,750 will be from Schneider Power in case of the Minimum
Offering, and $1,795,437 will be from the Corporation and $1,087,750 will be
from Schneider Power in the case of the Maximum Offering.

    Calculation of Working Capital:

    
    -------------------------------------------------------------------------
                                                        Minimum      Maximum
    Current Assets                                     Offering     Offering
    -------------------------------------------------------------------------
    Cash                                             $3,578,689   $4,418,689
    -------------------------------------------------------------------------
    Accounts Receivable                                $125,799     $125,799
    -------------------------------------------------------------------------
    Other Receivables                                   $12,140      $12,140
    -------------------------------------------------------------------------
    Deposits and Prepaid Expenses                      $334,935     $334,935
    -------------------------------------------------------------------------
                                                        Minimum      Maximum
    Current Liabilities                                Offering     Offering
    -------------------------------------------------------------------------
    Bank Indebtedness                                $1,160,000   $1,160,000
    -------------------------------------------------------------------------
    Accounts Payable and Accrued Liabilities           $785,896     $785,896
    -------------------------------------------------------------------------
    Current Portion of Long-term Debt                   $62,480      $62,480
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Working Capital                                  $2,043,187   $2,883,187
    -------------------------------------------------------------------------


    Available Funds and Principal Uses of Funds
    -------------------------------------------
    The following table sets out information respecting the Resulting Issuer's
sources of cash and intended uses of cash upon completion of the Qualifying
Transaction. The amounts presented are estimates only.


    -------------------------------------------------------------------------
                                                        Minimum      Maximum
    Source of Funds                                    Offering     Offering
    -------------------------------------------------------------------------
    Pro Forma Consolidated Working Capital            2,043,187   $2,883,187
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                        Minimum      Maximum
    Use of Funds                                       Offering     Offering
    -------------------------------------------------------------------------
    Construction Related Deposits:
    -------------------------------------------------------------------------
      - Revenue Meters                                  $60,000      $60,000
    -------------------------------------------------------------------------
      - Transformers                                   $180,000     $180,000
    -------------------------------------------------------------------------
    Project Development (Canada & USA)                 $303,187   $1,143,187
    -------------------------------------------------------------------------
    Working Capital                                  $1,500,000   $1,500,000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total use of funds                               $2,043,187   $2,883,187
    -------------------------------------------------------------------------
    


    Sponsorship
    -----------
    A general policy of the Exchange requires that a sponsor be retained to
prepare a sponsor report in compliance with Exchange Policy 2.2. The
Corporation has applied for and received an exemption from the sponsorship
requirements from the Exchange as a result of the number and value of brokered
private placements and debt financings conducted by Schneider Power,
including, the Offering.

    Arm's Length Transaction
    ------------------------
    Since the transaction is arm's length, the Corporation is not required to
obtain shareholder approval. The Corporation proposes to issue a filing
statement pursuant to Exchange policies containing full disclosure regarding
Schneider Power and the Qualifying Transaction. This filing statement is
accessible on SEDAR by viewing the Corporation's public
documents(www.sedar.com).

    Board of Directors and Management
    ---------------------------------
    Immediately following the Qualifying Transaction closing:

    
    (a) the board of directors of the Resulting Issuer is expected to be
        comprised of the following six individuals: Bernd Schneider; Thomas
        Schneider; Jonathan Lundy; Ralf Krueger; Richard Boxer and Timothy
        Gallagher.

    (b) the audit committee of the Resulting Issuer is expected to be
        comprised of: Richard Boxer (Chair); Timothy Gallagher and Ralf
        Krueger; and

    (c) the compensation, corporate governance and nominating committee is
        expected to be comprised of: Richard Boxer (Chair) and Jonathan
        Lundy.
    

    The management team of the Resulting Issuer is expected to be comprised
of the following individuals:

    Bernd Schneider, Chairman
    Thomas Schneider, Vice-Chairman and President
    Jonathan Lundy, Chief Executive Officer
    John Ng, Chief Financial Officer

    Profiles of the proposed directors of the Resulting Issuer are as
follows:

    Richard Boxer, 59, is a director of Water Capital. He has been president
of Buckingham Capital Corporation, which is a privately owned Canadian
merchant bank, since October 1992. Buckingham has been involved, either as an
agent or as a principal, in various equity or debt financings, the majority of
which have involved early stage Canadian companies on Canadian stock
exchanges. Mr. Boxer serves, and has served, as a director on a number of TSX
Venture Exchange-listed companies, private companies and not-for-profit
organizations. Mr. Boxer earned his bachelor of arts degree in geography and
economics from Queens University, his Masters of Business Administration from
York University and was granted his chartered accountant designation by the
Canadian Institute of Chartered Accountants.

    Timothy Gallagher, 48, is a director and chief executive officer, chief
financial officer and president of Water Capital and Antamena Capital Corp. He
has been president of Inflection Capital Inc., a private investment company
since March, 2005. He was a director and chief financial officer of York
Capital Corp. (now Silverbirch Inc.) from March 2004 to September 2005 and a
director, president and chief executive officer of Ontario Capital
Opportunities Inc. (now Biorem Inc.), a CPC, from December 2003 until January
2005. In 1997 he founded and since 2002 has served as managing partner of
Intellectual Investments, which invests in and assists early-stage companies.
He was executive vice-president of Kinghaven Securities Limited from December
1996 to March 2002. Previously, Mr. Gallagher worked in corporate finance from
1989 to 1994 at Union Bank of Switzerland (Canada) and in institutional sales
for Loewen Ondaatje McCutcheon from 1994 to 1996. He has experience in
identifying, evaluating and working with early stage companies including
participation in active management, business development, investor relations
and investment banking services. He has assisted a number of companies with
raising funds to implement their growth plans. Mr. Gallagher was co-chairman
of the MIT Schulich Enterprise Forum, the Toronto chapter of MIT
Cambridge- based network of hi-tech forums. Mr. Gallagher earned his bachelor
of commerce degree from McMaster University, his Masters of Business
Administration from York University and was granted his Chartered Financial
Analyst designation by the CFA Institute.

    Bernd Schneider, 58, is the Chairman and a director of Schneider Power
and has occupied such position since Schneider Power's inception in April
2004. Prior to April 2004, Mr. Schneider was a self-employed entrepreneur with
investments in globally branded hotel properties as well as commercial and
industrial real estate. From 1970 to 1985 he was President and Chief Executive
Officer of the German based Schneider family owned hydro-electric power
company Elektrizitatswerk Horb KG ("EWH"). In 1985 Mr. Schneider spearheaded
the merger and sale of EWH with the German Government controlled Energie
Baden-Wurttemberg AG. Prior to taking over the family business, Mr. Schneider
was a Senior Banker with Volksbank & Raiffeisenbankin Horb a. N., Germany.

    Thomas Schneider, 33, is the Vice-Chairman, President and a director of
Schneider Power. From April 2004 to July 2008, he was the Chief Executive
Officer of Schneider Power. Prior to founding Schneider Power in April 2004,
Mr. Schneider was Chief Executive Officer of Line Entertainment Holdings Inc.,
a Toronto based marketing and media consulting firm. From 1998 to 2003 Mr.
Schneider was President of Veer Music Canada Inc., a Montreal based record
Company. Mr. Schneider is a member of the Ontario Caucus of the Canadian Wind
Energy Association and the Young Executive Committee of the German-Canadian
Chamber of Commerce. Mr. Schneider holds a Bachelor of Commerce (B.Com) degree
in Finance and International Business from McGill University, Montreal. He has
a certificate in Business Law from the University of Toronto and holds
advanced level certificates in Mathematics, Physics and Chemistry from the
University of London, England and the University of Cambridge, England. His
work has garnered several awards including, the 2001 Golden Web Award, the
2000 Canadian Marketing Award, the 1999 Summit Award, the 1999 Spirit Award
and the 1994 MIS Physics Award.

    Jonathan Lundy, 45, is the Chief Executive Officer of Schneider Power.
Prior to joining Schneider Power in 2008, Mr. Lundy served in a number of
executive capacities with Hydrogenics Corporation, a TSX and NASDAQ listed
company. From 2000-2004 Mr. Lundy served as Hydrogenics' Vice President
Corporation Affairs and General Counsel, from 2004-2005 he served as
President, Power and Generation, and from 2005-2007 he served as President,
Power Systems. Prior to joining Hydrogenics Mr. Lundy practiced corporate and
securities law with Osler, Hoskin and Harcourt LLP, from 1998-2000, and Heenan
Blaike LLP from 1996-1998. He holds a Bachelor of Arts and a Bachelor of Laws
from the University of Western Ontario.

    Ralf Krueger, 48, is a director of Schneider Power and Chief Executive
Officer of Juwi Wind US Corp. in the United States. He is Chief Legal Counsel
and Head of International Projects of Juwi, GmbH a leading German wind and
solar development company since 2002. Mr. Krueger has been active in all
aspects of the international wind energy business for over ten years. In his
capacity as an attorney, he specializes in energy, land use, zoning, real
estate and environmental law. Mr. Krueger oversees Juwi's international
operations in Costa Rica and the United States and is an avid, well-recognized
amateur ornithologist with extensive experience in the evaluation of avian and
other wild life studies.

    Conditions
    ----------
    Completion of the Qualifying Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and if
applicable pursuant to Exchange Requirements, majority and minority
shareholder approval. Where applicable, the transaction cannot close until the
required shareholder approval is obtained. There can be no assurance that the
transaction will be closed as completed or at all.
    Exchange approval requires, among other things, satisfaction by the
Resulting Issuer of the minimum listing requirements, including adequate
financial resources and working capital, sponsorship, background review of the
proposed directors, officers and insiders and share distribution. The
Corporation believes that the minimum listing requirements will be satisfied
or waived.
    Investors are cautioned that, except as disclosed in the filing statement
to be prepared in connection with the transaction, any information released or
received with respect to the transaction may not be accurate or complete and
should not be relied upon. Trading in the securities of a capital pool company
should be considered highly speculative.

    The Exchange has not reviewed and does not accept responsibility for the
    adequacy or accuracy of this release. The Exchange has in no way passed
    upon the merits of the proposed Qualifying Transaction and has neither
    approved nor disapproved the contents of this release.





For further information:

For further information: Thomas Schneider, President, Schneider Power
Inc., t.s@schneiderpower.com, Tel: (416) 847-3724; Timothy Gallagher,
President, Water Capital Inc., tim_gallagher@sympatico.ca, Tel: (416)
925-0090

Organization Profile

WATER CAPITAL INC.

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