More Land to Build VANCOUVER, BC / ACCESSWIRE / May 27, 2021 / Cielo Waste Solutions Corp. (CSE:CMC)(OTCQB:CWSFF) ("Cielo" or the "Company") is pleased to announce that it has entered into an agreement to purchase land (the "Land"), on approximately 60 acres in Fort Saskatchewan, a municipality 25km from Alberta's capital city of Edmonton. The Land is a greenfield property with infrastructure including a 31,750 sq ft building and 35 acres that is graveled and improved, including fence, power and a yard compacted to 10 tons per square foot. The Land was developed in 2015 for approximately CDN$21M in the Alberta Industrial Heartland, Canada's largest hydrocarbon processing region.
The site was built by a global construction and fabrication company from Belgium, which management believes has many advantages for Cielo such as access to global markets through the two largest rail lines in Canada and pipelines to deliver fuel directly to our off-take clients. The Land, with its amenities, is expected to accelerate the build-out of the proposed facility and shorten the timeframe to production considerably.
Cielo has agreed to purchase the Land for CAD $13,000,000, $1,000,000 to be paid by way of two (2) refundable deposits by Cielo, and the balance to by funded by way of the Loan (as defined and described below). While the purchase of an existing industrial building resulted in a higher initial cost than anticipated by the Company, the value of the Land combined with the time savings compared to new construction, is substantially more beneficial to the Company in the opinion of management. The purchase is subject to certain conditions and is anticipated to close upon the satisfaction of those conditions. Cielo will provide further updates as and when they become available.
FINANCING PURCHASE OF LAND:
Cielo is also pleased to announce that it has accepted a binding term sheet for the financing of the balance of the purchase of the Land. First Choice Financial ("FCF") has agreed to deliver a loan to the Company of $12,000,000 for the purchase (the "Loan"). The Loan will mature after 2 years and is subject to simple interest at a rate of 6% per year, payable monthly throughout the term of the Loan and can be extended by the lender. Cielo will also issue 12,000,000 non-transferable bonus warrants to FCF, exercisable for a period of 36 months at an exercise price of CAD $1.00 per share. Cielo will be entitled to repay the Loan at any time without penalty. Other than certain expenses of FCF associated with the Loan, no additional fees or commissions will be payable to FCF or any finders.
The Loan will be secured by all of the assets of the Company, including charges against the land and facilities in Fort Saskatchewan and Aldersyde. The Loan is also subject to certain customary conditions. Closing is anticipated to coincide with the completion of the purchase of the Land.
Don Allan, CEO of Cielo Waste Solutions stated, "We are pleased to have secured this land, which is in proximity to "Refinery Row", a nickname given to this location in Fort Saskatchewan because of all the major blending refineries that we believe will be the primary customers buying our fuel for mandated renewable blending requirements in Canada. With the amenities and infrastructure in place, we believe Cielo will have the ability to build our second 100% owned facility in a timely manner". Mr. Allan continued: "We believe the debt financing is favourable and allows flexibility for early payout. We are very pleased with FCF's term sheet and we appreciate their belief and support in Cielo. We will continue our focus on installation of the desulfurization equipment and increased production on our Aldersyde facility and begin the building of this new plant as per our projected timelines. Once both facilities are operating, the Company is expected to enjoy a significant increase in revenue and earnings and paves the foundation for future growth."