EDMONTON, Alberta – Capital Power L.P., the entity that holds substantially all of Capital Power Corporation’s (Capital Power, or the Company) (TSX: CPX) assets, today announced that it has entered into an agreement to sell the limited partnership that owns two British Columbia hydro facilities, Miller Creek and Brown Lake, to Innergex Renewable Energy Inc. (Innergex) (TSX: INE) for approximately $69.2 million.
Innergex’s acquisition of the Miller Creek facility is conditional upon a 30-day right of first refusal in favour of BC Hydro.
The agreement to divest the 33 megawatt (MW) Miller Creek facility and 7.2 MW Brown Lake facility follows the 2011 sale of the Taylor Coulee Chute facility (13 gross MW). Upon closing of the transaction, the Company’s stated objective of divesting all of its hydro facilities will be completed.
“The sale of these small, non-core hydro assets is consistent with our strategy of operating larger facilities and focusing our generation technologies in natural gas, coal, and wind while also exploring solar projects,” said Capital Power President & CEO, Brian Vaasjo. “The sale proceeds of $69.2 million are in line with our expectations and modestly exceed the carrying value of these assets. We plan to redeploy the net proceeds into our current wind development projects, which are expected to deliver stronger returns.”
The transaction is expected to close in July, 2012 subject to regulatory approvals and other customary closing conditions. CIBC World Markets Inc. is acting as financial advisor to Capital Power on the transaction.
About Capital Power Corporation
Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,300 megawatts of power generation capacity at 16 facilities across North America. An additional 487 megawatts of owned wind generation capacity is under construction or in advanced development in British Columbia, Alberta, and Ontario.
Forward-looking information or statements included in this press release are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.
Material forward-looking information in this press release includes information with respect to: (i) expectations and assumptions concerning satisfaction of all conditions of closing of the transaction and the timing, effect and fact of a successful closing of the transaction; (ii) expectations regarding the Company’s use of the funds received as sale proceeds; and (iii) expectations regarding the returns generated by the uses to which the sale proceeds are put in comparison to the returns generated by the Miller Creek and Brown Lake hydro facilities.
These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, and other factors it believes are appropriate.
Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such material risks and uncertainties are: (i) failure to close the acquisition; (ii) whether or not BC Hydro exercises its right of first refusal over the Miller Creek hydro facility; and (iii) the actions or decisions of regulators and the potential failure to obtain the necessary regulatory approvals. See Risks and Risk Management in the Company’s Management’s Discussion and Analysis dated March 13, 2012 for further discussion of these and other risks.