Regarding rate of return on OREC investments in Ontario…
- Every member of OREC pays $100 for a lifetime Membership Share.
- This is the controlling equity of the cooperative. This gives that ‘person’ a single vote.
- The person must be domiciled in Ontario when they join. can move later and keep their investments but can NOT vote if they have left Ontario.
- There is no expected return for the membership share. (capital or dividend).
- Members can invest in Preference Shares (equity in OREC’s Portfolio) and/or Investment Notes (Loan to OREC)
- Preference shares; the ‘target’ dividend for OREC preference shares is a steady 4% on outstanding capital. It will be determine each year by the board depending on the annual profitability. Could be higher, could be lower.
- Equity in OREC portfolio, to date we have raised over $12Million in Preference shares. Class A, B, C, D, E.
- Each class has a different term, over which the capital is repaid. (for example Class A Shares = 20yr term, capital repayment in equal installments over the last 15 years; Class E share = 10yr term, capital repayment 5% each year, then 55% in year 10.
- Dividend is taxed as Dividend (lower marginal rate than interest); capital repayments are NOT taxable.
- Investment Notes; pay an set Interest Rate, based on a rate set to be competitive a the time of issuance.
- Loan from the member to the Cooperative
- Five year term. Single ballon payment of balance after 5 years.
- Interest paid each year. Rate set at time of issuance.
- Interest is taxed as Interest (higher marginal rate than dividends); capital repayments are NOT taxable.
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