Genterra Capital Inc. Announces Plan of Arrangement for Spinoff of Subsidiary

TORONTO, July 10, 2015 /CNW/ - Genterra Capital Inc. (GIC – TSX-V) ("Genterra") is pleased to announce that it has entered into a definitive agreement with its wholly-owned subsidiary, Genterra Energy Inc. ("Genterra Energy"), to undertake a plan of arrangement whereby Genterra will spin-off approximately 28% of Genterra Energy to the holders of Genterra's common shares (the "Genterra Shareholders") other than Genterra's Chairman, Fred A. Litwin, and members of his family and their respective associates and affiliates (the "Litwin Group").

Transaction Details

Pursuant to the Arrangement, common shares of Genterra ("Genterra Shares") held by Genterra Shareholders, other than the Litwin Group, will be exchanged for cash and, subject to the number of Genterra Shares held by a Genterra Shareholder, common shares of Genterra Energy ("Genterra Energy Shares"). If approved and completed, the Arrangement will result in Genterra Energy being spun-off as a public company and Genterra being wholly-owned, directly and indirectly, by the Litwin Group.

Under the terms of the Arrangement, Genterra Shareholders, other than the Litwin Group, will receive in respect of each Genterra Share that they hold, the following consideration:

• Each Genterra Shareholder who holds less than 500 Genterra Shares will receive Cdn$2.25 in cash for each Genterra Share held; and
  
• Each Genterra Shareholder who holds 500 Genterra Shares or more will receive Cdn$1.96 in cash and two (2) Genterra Energy Shares.

The two (2) Genterra Energy Shares offered as partial consideration for each Genterra Share held by a Genterra Shareholder who holds 500 Genterra Shares or more represents Cdn$0.29 per Genterra Share based on a Valuation Report dated June 23, 2015 of Corporate Valuation Services Limited ("CVS").

On completion of the Arrangement, former Genterra Shareholders, other than the Litwin Group, are expected to hold approximately 28% of the outstanding Genterra Energy Shares.  It is intended that an application be made for the listing of the Genterra Energy Shares on the Canadian Securities Exchange.

Prior to completion of the Arrangement, Genterra Energy intends to change its name to Gencan Inc., or such other name as its directors deem appropriate, and it will also effect a split of its 100 issued and outstanding common shares into issued and outstanding into 16,628,716 common shares.

Genterra's board of directors has unanimously approved the transaction and recommends that Genterra shareholders vote in favour of the Arrangement.

CVS has provided an opinion to a Special Committee of Genterra's board of directors that the consideration is fair from a financial point of view to Genterra Shareholders other than the Litwin Group.

Benefits to Genterra Shareholders

• The total value of the consideration offered for each Genterra Share, in the amount of Cdn$2.25, represents a premium of 73% to the closing price of the Genterra Shares on the TSX Venture Exchange (the "TSXV") on July 2, 2015.
  
• The Arrangement allows investors to participate directly in growth opportunities which may become available through Genterra Energy's growth strategies.
  
• The spin-off of Genterra Energy as an independent company is expected to provide management of Genterra Energy with a sharper business focus for execution of short-term and long-term strategic plans and to enhance Genterra Energy's ability to pursue its independent corporate objectives.
  
• It is expected that the Arrangement will allow investors to more accurately evaluate Genterra Energy on a stand-alone basis against appropriate peers, benchmarks and performance criteria specific to Genterra Energy.

In order to become effective, the Arrangement must be approved by a resolution passed by at least 66⅔% of the votes cast by the Genterra Shareholders present in person or by proxy at a meeting of Genterra Shareholders and by a simple majority of the votes cast excluding the votes of Genterra Shares held or controlled by the Litwin Group. In addition to that approval, completion of the Arrangement will be subject to certain customary conditions, including the approval of the Ontario Superior Court of Justice. Full details of the transaction will be set out in Genterra's information circular that it will prepare in respect of the meeting of shareholders to approve the transaction.

Copies of the Arrangement Agreement, management information circular and certain related documents will be filed with securities regulators and will be available on SEDAR at www.sedar.com.

About Genterra Energy Inc.

Genterra Energy is currently a wholly-owned subsidiary of Genterra and conducts Genterra's solar energy operations. Genterra Energy's primary asset is its significant interest in a Renewable Power Solar Rooftop Photovoltaic System. Since August 2014, Genterra Energy has engaged in the business of solar energy generation and installation of solar energy generation equipment under a Feed-In-Tariff Contract with the Ontario Power Authority.

About Genterra Capital Inc.

Genterra Capital Inc. is a Canadian management holding company operating in Canada with interests in rental real estate properties and solar energy generation equipment located in Ontario, Canada. The Company also invests a portion of its surplus cash on hand in marketable securities and notes receivable.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward- looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Cautionary Note Regarding Forward-Looking Statements
Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian Securities Regulators, which filings are available at www.sedar.com.

SOURCE Genterra Capital Inc.

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