Energy Choice
                            

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Parent Of Retail Supplier Enters Letter Of Intent To Dispose of HVAC/Water Heater Rental Assets, Reports Earnings

March 15, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

ONEnergy Inc., the parent of retail supplier Sunwave Gas & Power, has entered into a non-binding letter of intent with Cricket Energy Holdings Inc. to sell the rental equipment assets of ONEnergy's Home Comfort business for approximately $8.3 million (all $ Canadian) and the assumption of Home Comfort’s debt with respect to the related rental equipment assets.

Home Comfort owns and operates a portfolio of furnaces, air conditioners, boilers and ancillary equipment and water heaters, which are rented to residential customers in Ontario and Alberta, under long-term water heater and HVAC rental programs. In addition, Home Comfort sells and installs HVAC and water heaters directly to residential customers. Since mid-2015, Home Comfort has focused principally on the Ontario new home construction market.

The purchase price will be satisfied through cash and a promissory note. In addition, ONEnergy will provide a promissory note to Cricket to satisfy advances Cricket has made to ONEnergy. ONEnergy expects that it will enter into a definitive agreement with Cricket during Q2 2017. The sale will be subject to the approval of ONEnergy's shareholders and the TSX Venture Exchange. One of Cricket’s significant shareholders is the controlling shareholder of OZZ Electric Inc. and is also a shareholder of ONEnergy. As previously reported, ONEnergy Inc. has entered into a letter of intent with OZZ Electric Inc., an energy services company, which contemplates an acquisition of all of the common shares of OZZ in exchange for the issuance of common shares of a successor corporation to ONEnergy (see details here)

For the three-month period ended December 31, 2016, ONEnergy reported adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) loss, and net loss, of $1.2 million and $1.3 million, respectively, compared to an Adjusted EBITDA loss and net loss of $0.7 million and $2.7 million, respectively during Q4 2015.

For the three-month period ended December 31, 2016, ONEnergy revenues from continuing operations increased by 70 percent to $10.0 million versus $5.9 million during the corresponding period in 2015. The increase reflects the company’s continued organic growth in its U.S. retail energy supply business as it added new markets such as Ohio and Pennsylvania.

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