Tortoise Capital Resources Corp. Announces Agreement to Sell the Eastern Interconnect Project in April 2015
02 November 2012 - 9:15PM
Business Wire
Tortoise Capital Resources Corp. (NYSE: TTO) today announced
that on November 1, 2012 it entered into a definitive agreement
with Public Service Company of New Mexico (PNM) for the sale of its
40-percent undivided interest in the Eastern Interconnect Project
(EIP) upon lease termination on April 1, 2015. The lease provides
PNM an end-of-lease option to purchase TTO’s interest for fair
market value, and the parties agreed to a value of $7.7 million for
the transaction.
TTO acquired an existing lease for the EIP—a 216 mile, 345-kV
bulk power transmission line and related equipment and
substations—on June 30, 2011 and will continue to lease its
interest in the EIP to PNM through April 1, 2015.
The negotiation of the end-of-lease purchase option was prompted
in part by a directive from the Federal Energy Regulatory
Commission (FERC). FERC directed PNM, in consultation with TTO, to
identify the party that would provide transmission service over the
leased portion of the EIP beyond the lease expiration in 2015. The
announced agreement completes the response to FERC’s order and is
subject to FERC approval.
“As expected with the risk profile of this type of asset, the
return on this transaction will be at the low end of our targeted
range,” said TTO’s Chief Executive Officer Dave Schulte. “We
continue to execute our strategy to become a Real Estate Investment
Trust (REIT), and expect to qualify for REIT status for 2013.”
About Tortoise Capital Resources Corp.
Tortoise Capital Resources Corp. (NYSE: TTO) is an energy
infrastructure asset financing company that provides capital to
pipeline, storage and power transmission operators. TTO’s
investments include securities and real assets with long-term,
stable cash flows, limited commodity price sensitivity, and growth
opportunities. TTO is managed by Corridor InfraTrust Management,
LLC. (www.corridortrust.com). Corridor is an affiliate of Tortoise
Capital Advisors, L.L.C., an investment manager specializing in
listed energy infrastructure investments with approximately $9.1
billion of assets under management as of September 30, 2012.
Safe Harbor Statement
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the laws of such state or jurisdiction.
Forward-Looking Statement
This press release contains certain statements that may include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Although the Company and Corridor InfraTrust Management, LLC
believe that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
Actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's reports that
are filed with the Securities and Exchange Commission. You should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Other than as
required by law, the Company and Corridor InfraTrust Management,
LLC do not assume a duty to update this forward-looking statement.
Any distribution paid in the future to our stockholders will depend
on the actual performance of the Company, its costs of leverage and
other operating expenses and will be subject to the approval of the
Company's Board and compliance with leverage covenants.
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