Nevada Geothermal Power reviewing mezzanine debt restructuring options

By Caroline Salls

Pittsburgh, Jan. 17 - Nevada Geothermal Power Inc. has hired Canaccord Genuity as financial adviser to determine strategic alternatives in the restructuring of the company's mezzanine debt, according to a news release.

Nevada Geothermal said a program was initiated in 2011 to preserve generation capacity and is nearing completion.

The company said the program objective is to shift injection away from the injection wells that return cooled geothermal fluid from the plant back to the production zone too quickly.

According to the release, reservoir simulation modeling by GeothermEx, Inc. has estimated that the re-distribution of injection into specified wells will allow senior loan covenants to be met through the remaining 17-year life of the company's facility.

Nevada Geothermal said the mezzanine debt service coverage ratios are in breach, and it is working with lenders and its adviser to restructure the loan.

In addition, a tax-assisted financing is planned with agent Marathon Capital, LLC to monetize deductions following the completion of the current injection program and confirmation of the reservoir response.

The company said its $20 million drilling and development project has excellent financial returns because wells can be placed in service as they are completed and connected by pipeline to use the excess production capacity of its existing Faulkner 1 plant.

Production increases may require the approvals from the company's senior debtholder and some regulatory agencies. GeothermEx has been hired to independently assess the proposed development project.

In addition to its Blue Mountain program in Nevada, Nevada Geothermal said it is actively working on development programs at Crump Geyser with Ormat in Oregon and at New Truckhaven in the Imperial Valley region of California.

Nevada Geothermal is a renewable energy company based in Vancouver, B.C.

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