Atlantic Power Corporation and Capital Power Income L.P. Announce Close of Acquisition of Capital Power Income L.P.
04 November 2011 - 5:17PM
PR Newswire (Canada)
Atlantic Power Corporation Announces Closing of Private Offering of
US$460 Million Senior Notes and an Increase in Annual Dividend on
Common Shares BOSTON, Nov. 7, 2011 /CNW/ -- Atlantic Power
Corporation ("Atlantic Power" or the "Company"), a leading power
and infrastructure company, and Capital Power Income L.P. ("CPILP")
today reported that Atlantic Power has completed its previously
announced acquisition of CPILP pursuant to a court-approved plan of
arrangement (the "Arrangement"). "We could not be more pleased to
bring our first corporate acquisition to close for our
shareholders," said Barry Welch, President and CEO of Atlantic
Power. "Adding eighteen high quality projects, along with
experienced operations personnel with a stellar operating and
safety record to Atlantic Power's portfolio, provides a more
diversified base of operations and steady, contracted cash flows
that will support our dividend. Our portfolio now has an average
remaining PPA length of 9.1 years, our net generating capacity has
increased 143% to 2,116 MW, and we now have approximately 300
employees throughout North America. In addition, the acquisition
strengthens our ability to execute our continued growth plans by
providing an extended footprint into Canada, as well as a
strengthened U.S. presence," said Mr. Welch. The acquisition of
CPILP is expected to be accretive to cash flows. Atlantic Power
also announced today an increase in its dividend to Cdn$1.15/common
share per annum, which became effective as of November 5, 2011.
"With the close of the Capital Power Income L.P. acquisition, we
turn our attention to completing the integration of its assets and
people into Atlantic Power," said Mr. Welch. "We have planned and
executed detailed integration work plans over the last four months
to ensure a smooth day one transition. We also have a transition
services agreement in place with Capital Power Corporation over the
next 6 to 12 months in respect of certain services to facilitate
ongoing integration, but we anticipate that our integration efforts
thus far will minimize our reliance on transition services. At the
project level, we have had 100% retention of the operations
personnel and plant managers, and we are building out our corporate
level staff to enhance accounting, finance, tax, operations,
commercial and legal support across the entire fleet of 30
generation facilities." On Friday, November 4, 2011, Atlantic Power
closed its previously announced private offering of US$460.0
million aggregate principal amount of senior notes due 2018 (the
"Notes") with a coupon of 9.0%, at an issue price of 97.471% to
fund a portion of the cash component of the purchase price for its
direct and indirect acquisition of all limited partnership units of
CPILP. "While debt and equity capital markets were less than ideal,
our marketing efforts in connection with the equity and debt
offerings expanded Atlantic's base of institutional investors,
while maintaining the strong support of our retail investors," said
Mr. Welch. "In the months since announcing the CPILP deal, we have
not taken our eyes off the acquisition and development market and
we hope to take advantage of that broadened base of support to
deliver additional accretive acquisitions to our shareholders."
Atlantic Power focuses on the North American market when
considering acquisition opportunities, and is opportunistic with
regards to fuel type and the geographical location of its targets.
Joint ventures with experienced renewables development companies,
with a pipeline of projects in early construction or late-stage
development, is one strategy that management uses for sourcing
projects to grow Atlantic Power's asset base. Effect of Dividend
Increase for Shareholders For the month of November 2011, Atlantic
Power intends to pay a dividend of Cdn$.0953 per common share to
shareholders of record on the applicable record date, which
represents a prorated dividend for the month of November calculated
by applying the annual rate of Cdn$1.0944 per common share for the
period from November 1 to November 4 and the annual rate of
Cdn$1.15 per common share for the remainder of November. For the
month of December 2011, Atlantic intends to pay a dividend of
Cdn$.0958 per common share to shareholders of record on the
applicable record date based on the increase to the Company's
annual dividend to Cdn$1.15 per common share. CPILP Unitholder
Election Results Pursuant to the Arrangement, Atlantic directly and
indirectly acquired each outstanding limited partnership unit of
CPILP in exchange for Cdn$19.40 in cash ("Cash Consideration") or
1.3 Atlantic Power common shares ("Share Consideration") in
accordance with elections and deemed elections in accordance with
the Arrangement. As a result of the elections made by CPILP
unitholders and pro-ration in accordance with the Arrangement,
those unitholders who elected to receive Cash Consideration will
receive in exchange for each limited partnership unit of CPILP (i)
cash equal to approximately 73% of the Cash Consideration and (ii)
Share Consideration in respect of the remaining approximately 27%
of the consideration payable for the unit. Any limited partnership
units of CPILP not exchanged for cash consideration in accordance
with the Arrangement have instead been exchanged for Share
Consideration. Atlantic Power will provide or make available a tax
information package to eligible unitholders that have indicated
their intention to file a tax election in respect of the
disposition of their units in accordance with the Arrangement. Any
questions or requests regarding consideration under the Arrangement
may be directed to the depositary for the Arrangement,
Computershare Investor Services Inc., at 1-800-564-6253 (toll-free
in North America) or by e-mail at
corporateactions@computershare.com. Former non-registered holders
of limited partnership units of CPILP should contact their broker
or other intermediary for details. De-Listing of Limited
Partnership Units of CPILP De-listing of the limited partnership
units of CPILP from the Toronto Stock Exchange is expected to occur
or about November 9, 2011. Atlantic Power common shares trade on
the New York Stock Exchange and the Toronto Stock Exchange, under
the symbols AT and ATP, respectively. About Atlantic Power Atlantic
Power is a leading publicly traded, power generation and
infrastructure company with a well diversified portfolio of assets
in the United States and Canada. Our power generation projects sell
electricity to utilities and other large commercial customers under
long-term power purchase agreements, which seek to minimize
exposure to changes in commodity prices. The net generating
capacity of the Company's projects is approximately 2,116 MW,
consisting of interests in 30 operational power generation projects
across 11 states and 2 provinces, one 53 MW biomass project under
construction in Georgia, and an 84-mile, 500 kilovolt electric
transmission line located in California. Atlantic Power also owns a
majority interest in Rollcast Energy, a biomass power plant
developer with several projects under development. Atlantic Power
is incorporated in British Columbia, headquartered in Boston and
has offices in Chicago, Toronto, and Richmond, B.C. Our corporate
strategy is to generate stable cash flows from our existing assets
and to make accretive acquisitions to sustain our dividend payout
to shareholders, which is currently paid monthly at an annual rate
of Cdn$1.15 per share. Atlantic Power has a market capitalization
of approximately $1.5 billion and trades on the New York Stock
Exchange under the symbol AT and on the Toronto Stock Exchange
under the symbol ATP. For more information, please visit the
Company's website at www.atlanticpower.com or contact: Atlantic
Power Corporation Amanda Wagemaker, Investor Relations(617)
977-2700 info@atlanticpower.com Copies of financial data and other
publicly filed documents are available on SEDAR at www.sedar.com or
on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power
Corporation" or on the Company's website. Cautionary Note Regarding
Forward-looking Statements To the extent any statements made in
this news release contain information that is not historical, these
statements are forward-looking statements within the meaning of
Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as amended
and under Canadian securities law (collectively, "forward-looking
statements"). Certain statements in this news release may
constitute "forward-looking statements", which reflect the
expectations of management regarding, among other things, the
expected benefits of the Arrangement, such as accretion, the
integration of CPILP, the payment of increased dividends, future
growth, results of operations, performance and business prospects
and opportunities of our Company and our projects. These
statements, which are based on certain assumptions and describe our
future plans, strategies and expectations, can generally be
identified by the use of the words "may," "will," "project,"
"continue," "believe," "intend," "anticipate," "expect" or similar
expressions that are predictions of or indicate future events or
trends and which do not relate solely to present or historical
matters. Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Although the
forward-looking statements contained in this news release are based
upon what are believed to be reasonable assumptions, investors
cannot be assured that actual results will be consistent with these
forward-looking statements, and the differences may be material.
Important factors that could cause actual results to differ
materially from these expectations include, among other things: --
the expectation that the acquisition of CPILP will be accretive to
cash flows; -- the possibility that the anticipated benefits and
synergies from the acquisition of CPILP cannot be fully realized or
may take longer to realize than expected; -- the possibility that
costs or difficulties related to the integration of Atlantic Power
and CPILP operations will be greater than expected; -- the ability
of the combined company to retain and hire key personnel and
maintain relationships with customers, suppliers or other business
partners; -- the impact of legislative, regulatory, competitive and
technological changes; -- the risk that the credit ratings of the
combined company may be different from what Atlantic Power expects;
-- the amount of distributions expected to be received from our
projects and our estimated net cash tax refunds; -- the expectation
that the conditions of the Toronto Stock Exchange to de-list the
limited partnership units of CPILP will be satisfied; -- no
assurances can be made that the Company will pay dividends at the
level contemplated in the future or at all; -- the other risk
factors relating to us and the power industry, as detailed from
time to time in our filings with the United States Securities and
Exchange Commission ("SEC") and/or Canadian securities regulators
and authorities, and other risk and uncertainties affecting the
Company, as detailed from time to time in Atlantic Power's filings
with the SEC and/or Canadian securities regulators and authorities
(including, without limitation, the factors discussed under "Risk
Factors" in the Company's periodic reports from time to time and in
the management proxy circular and joint proxy statement of Atlantic
Power and CPILP dated September 28, 2011), and CPILP's filings on
the SEDAR website at www.sedar.com). These forward-looking
statements are made as of the date of this news release and, except
as expressly required by applicable law, the Company assumes no
obligation to update or revise them to reflect new events or
circumstances. The financial outlook information contained in this
news release is presented to provide readers with guidance on the
cash distributions expected to be received by the Company and to
give readers a better understanding of the Company's ability to pay
its current level of distributions into the future. Readers are
cautioned that such information may not be appropriate for other
purposes. Atlantic Power Corporation CONTACT: Web Site:
http://www.atlanticpower.com
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