AT Atlantic Power Corporation

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 26, 2015

 

 

ATLANTIC POWER CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

(617) 977-2400

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.01.             Completion of Acquisition or Disposition of Assets.

 

As previously reported, on March 31, 2015, Atlantic Power Transmission, Inc. (the “Seller”), a wholly-owned, direct subsidiary of Atlantic Power Corporation (the “Company”), entered into a definitive agreement with TerraForm AP Acquisition Holdings, LLC (the “Buyer”), an affiliate of SunEdison, Inc. (an affiliate of TerraForm Power, Inc.), to sell the Company’s wind generation projects (the “Sale”).  On June 26, 2015, the Sale was completed. The Sale took the form of a sale by the Seller of 100% of its direct membership interests in TerraForm AP Holdings, LLC to the Buyer for aggregate cash proceeds of approximately $333 million after estimated transaction fees, transaction-related taxes and other working capital adjustments. The Buyer thereby acquired the Company’s indirect interests in its portfolio of wind generation projects consisting of five operating wind projects in Idaho and Oklahoma and representing 521 MW net ownership: Goshen North (12.5% economic interest), Idaho Wind (27.6% economic interest), Meadow Creek (100% economic interest), Rockland Wind Farm (“Rockland”) (50% economic interest, but consolidated on a 100% basis), and Canadian Hills (99% economic interest).

 

In addition to the receipt of approximately $333 million in cash proceeds, the Company will deconsolidate approximately $249 million of project debt (or approximately $275 million as adjusted for the Company’s proportional ownership of Rockland, Goshen North and Idaho Wind) and approximately $229 million of non-controlling interest related to tax equity interests at Canadian Hills and the minority ownership interests at Rockland and Canadian Hills.

 

The Company has engaged an independent financial advisor to consider all potential options for the use of proceeds from the Sale.  With the assistance of the independent financial advisor, and input from some of its shareholders, the Company has determined to use the proceeds from the Sale to redeem the Company’s 9.0% senior unsecured notes due 2018, Series B (the “9.0% Notes”). On June 26, 2015, the Company delivered to the holders of its 9.0% Notes a notice of redemption (the “Notice”), notifying those holders that pursuant to Section 3.07(ii) of the indenture, dated as of November 4, 2011 (as supplemented and amended from time to time, the “Indenture”) among the Company, the guarantors named therein, and Wilmington Trust, National Association, as trustee, the Company has elected to effect a redemption of $310,905,000 in aggregate principal amount of the Company’s outstanding 9.0% Notes, being the entire outstanding principal amount of the 9.0% Notes, in accordance with the terms of the Indenture and the 9.0% Notes.  Pursuant to the Notice, the 9.0% Notes are called for redemption in full on July 26, 2015 (the “Redemption Date”). The redemption price for the 9.0% Notes is equal to 104.50% of the principal amount thereof plus accrued and unpaid interest thereon to the Redemption Date (together, the “Redemption Amount”). From and after the Redemption Date, (i) interest on the 9.0% Notes will cease to accrue in accordance with the Indenture, unless the Company defaults in paying the Redemption Amount to the holders of the 9.0% Notes, and (ii) the only remaining right of the holders of the 9.0% Notes will be to receive payment of the Redemption Amount. Pursuant to the terms of the Indenture, upon the Company’s irrevocable deposit of the Redemption Price with the Trustee and the taking of all of other actions necessary under the Indenture, the 9.0% Notes and the Indenture will be deemed to have been satisfied in full and discharged and the Indenture will cease to be of any further effect.

 

The description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 7, 2015 and is incorporated herein by reference.

 

The pro forma financial information required pursuant to Item 9.01(b) will be filed by an amendment to this Current Report on Form 8-K within four business days after the closing of the Sale.

 

Item 7.01.             Regulation FD Disclosure.

 

On June 26, 2015, the Company issued a press release announcing the completion of the Sale. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by

 

2

 

reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in that filing.

 

Item 8.01.                                        Other Events.

 

The information set forth under “Item 2.01. Completion of Acquisition or Disposition of Assets” of this Current Report on Form 8-K is incorporated by reference into this Item 8.01.

 

Item 9.01.             Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information

 

The pro forma financial information required pursuant to this Item 9.01(b) will be filed by an amendment to this Current Report on Form 8-K within four business days of the closing of the Sale.

 

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release of the Company, dated June 26, 2015.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Atlantic Power Corporation
Dated: June 26, 2015	By:	/s/ Terrence Ronan
		Name:	Terrence Ronan
		Title:	Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release of the Company, dated June 26, 2015.

 

5

Exhibit 99.1

 

 

Atlantic Power Corporation Completes the Sale of Its Wind Portfolio and

Announces Call of Its Senior Unsecured Notes

 

DEDHAM, MASSACHUSETTS — June 26, 2015 /PR Newswire/ — Atlantic Power Corporation (NYSE: AT) (TSX: ATP) (“Atlantic Power” or the “Company”) announced today that it has completed the previously disclosed sale of its wind portfolio to an affiliate of SunEdison, Inc. (NYSE: SUNE) for cash proceeds of approximately $347 million, net of closing adjustments.  The wind portfolio consisted of five operating wind projects in Idaho and Oklahoma with a net ownership by Atlantic Power of 521 megawatts.

 

At closing, the Company also deconsolidated approximately $249 million of project debt and $229 million of noncontrolling interest related to tax equity interests at Canadian Hills and the minority ownership interests at Rockland and Canadian Hills.

 

Atlantic Power also announced today that it has called for redemption all of its outstanding 9.0 percent Senior Unsecured Notes due November 2018.  The outstanding principal amount to be redeemed is approximately $310.9 million.  The Notes will be redeemed in approximately thirty days at a redemption price equal to 104.50 percent of the principal amount thereof, plus accrued interest.

 

“The sale of our wind projects and the redemption of our Senior Unsecured Notes achieve two major components of our plan — cost reduction, including interest expense, and debt reduction.  The combined impact is cash flow positive on an annualized basis,” said James J. Moore, Jr., President and Chief Executive Officer of Atlantic Power.  “These actions also strengthen our balance sheet by reducing our leverage and improve our medium-term debt maturity profile.  We are continuing to explore other opportunities to reshape our remaining corporate debt with a goal of further improving our creditworthiness,” Mr. Moore added.

 

Net proceeds to Atlantic Power from the wind sale are expected to be approximately $333 million after estimated transaction fees and transaction-related taxes.  Proceeds will be used to fund the redemption of the Senior Unsecured Notes, consistent with the assumptions contained in the Company’s 2015 guidance provided on May 7, 2015.

 

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 2,137 megawatts (“MW”) in which its aggregate ownership interest is approximately 1,502 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 
Amanda Wagemaker, Investor Relations
(617) 977-2700 
info@atlanticpower.com

 

Copies of certain 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.

 

 

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:

 

·                  the sale of the wind projects and redemption of the Senior Unsecured Notes being cash flow positive on an annualized basis;

 

·                  the strengthening of the Company’s balance sheet by reducing its leverage and improving its medium-term debt maturity profile; and

 

·                  the Company’s ability to reshape its remaining corporate debt and improve its creditworthiness.

 

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, including, without limitation, the Company’s ability to evaluate and/or implement potential options, including asset sales or joint ventures, if the valuation of a particular asset or assets is compelling, to raise additional capital for growth and/or potential debt reduction.  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.  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.  The Company’s ability to achieve its longer-term goals, including those described in this news release, is based on significant assumptions relating to and including, among other things, the general conditions of the markets in which it operates, revenues, internal and external growth opportunities, its ability to sell assets at favorable prices or at all and general financial market and interest rate conditions.  The Company’s actual results may differ, possibly materially and adversely, from these goals. Readers are cautioned that such information may not be appropriate for other purposes.