DEDHAM, Mass., Feb. 9, 2016 /PRNewswire/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today changes to its capital allocation
strategy designed to create value for shareholders in a
tax-efficient manner, while also improving the Company's financial
flexibility and strengthening its balance sheet.
As part of this strategy, the Company will prioritize allocation
of its discretionary capital (after mandatory debt repayment) to
equity and debt repurchases, each under the normal course issuer
bid (NCIB) implemented in December
2015, with a goal of capturing value arising from compelling
price-to-value opportunities in its publicly traded securities. In
addition, the Company has identified additional high-return
investments in its existing projects as well as potential
repowering projects linked to extensions of power purchase
agreements (PPAs). Investments of this type yielded an average cash
return of approximately 26% in 2015.
As a result of this redirection of capital to expected
higher-return purposes, the Board of Directors, consistent with
management's recommendation, has eliminated the Company's common
stock dividend, effective immediately. Previously, the Company
had paid a dividend of Cdn$0.03 per
share quarterly, with the most recent payment on December 31, 2015. In conjunction with the
elimination of the common stock dividend, the Company's dividend
reinvestment plan (DRIP) has been terminated.
"Our convertible debentures are currently trading at substantial
discounts to par, and repurchases at these levels create value for
our common shareholders by reducing our cash interest payments,
delevering our balance sheet and improving our debt maturity
profile," said James J. Moore, Jr.,
President & CEO of Atlantic Power. "In addition, the price
of our common stock has been trading significantly below what we
believe to be its intrinsic value. If this discount is
sustained, we expect that the approximately US$10 million of annual cash savings from
elimination of the common stock dividend will be used to repurchase
common shares."
Mr. Moore continued, "We have committed to building shareholder
value via a strong focus on intrinsic value per share rather than
on absolute growth. We will undertake share repurchases only
when the price-to-value ratio is compelling, as it is
now. Further debt reduction is an important priority for the
Company and remains a significant component of our capital
allocation strategy. As measured against internal or external
equity investment opportunities, however, our own shares currently
provide the most attractive returns available to us."
Atlantic Power's repurchases of both its debt and equity are
subject to the limitations of the NCIB, as detailed in the
Company's press release dated December 22,
2015.
As previously disclosed in the Company's press release dated
January 26, 2016, Atlantic Power will
release its financial results for the three months and year ended
December 31, 2015 after the market
close on February 25, 2016 and will
hold an investor conference call at 8:30 AM
ET on February 26,
2016. The Company reaffirms its 2015 guidance for Project
Adjusted EBITDA of $200 to $215
million, Adjusted Cash Flows from Operating Activities of
$95 to $105 million and Adjusted Free
Cash Flow of $0 to $10 million.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power
generation assets in the United
States and Canada. The Company's power generation
projects sell electricity to utilities and other large commercial
customers largely under long-term power purchase agreements, which
seek to minimize exposure to changes in commodity
prices. Atlantic Power's power generation projects in
operation have an aggregate gross electric generation capacity of
approximately 2,141 megawatts ("MW") in which its aggregate
ownership interest is approximately 1,504 MW. The Company's
current portfolio consists of interests in twenty-three operational
power generation projects across nine states in the United States and two provinces in
Canada.
Atlantic Power 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
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents are
filed 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.
Forward-Looking Non-GAAP
The Company has not provided a reconciliation of forward-looking
non-GAAP measures, due primarily to variability and difficulty in
making accurate forecasts and projections, as not all of the
information necessary for a quantitative reconciliation is
available to the Company without unreasonable efforts.
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 the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on certain
assumptions and describe the Company's 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. Examples of such
statements in this press release include, but are not limited, to
statements with respect to the following:
- Changes to the Company's capital allocation strategy will
create value in a tax-efficient manner while improving the
Company's financial flexibility and strengthening its balance
sheet;
- the Company's ability to capture value from repurchases of its
equity and debt securities;
- the Company's ability to realize high returns on its internal
growth investments;
- the Company's view of the intrinsic value of its stock relative
to current trading levels;
- the expectation that the cash savings from elimination of the
dividend will be allocated to share repurchase, if the stock
continues to trade at a significant discount to intrinsic
value;
- 2015 Project Adjusted EBITDA will be in the range of
$200 to $215 million;
- 2015 Adjusted Cash Flows from Operating Activities will be in
the range of $95 to $105 million;
and
- 2015 Adjusted Free Cash Flow will be in the range of
$0 to $10 million.
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. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
Securities and Exchange Commission from time to time for a detailed
discussion of the risks and uncertainties affecting the Company.
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. 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.
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SOURCE Atlantic Power Corporation