Atlantic Power Announces Agreement to Acquire Cadillac Renewable Energy, LLC
October 25 2010 - 4:56PM
Marketwired
Atlantic Power Corporation (TSX: ATP)(NYSE: AT) ("Atlantic Power"
or the "Company") announced today that it has entered into an
agreement to acquire 100% of the membership interests of Cadillac
Renewable Energy, LLC ("Cadillac"), a 39.6 MW wood fired facility
located in Cadillac, Michigan from a joint venture which is owned
by ArcLight Energy Partners Fund II L.P. and Olympus Power, LLC.
The project has been in operation since July 1993. The purchase
price will be approximately $77 million, subject to customary
working capital adjustments, and will be funded by $35 million of
cash on hand and $42 million of assumed non-recourse, project-level
debt. Operations and maintenance will be managed by Rollcast
Energy, Atlantic Power's majority-owned subsidiary. The acquisition
is expected to close later in the fourth quarter. The Company
expects to receive distributions from the project in the range of
US$3.5 million to US$4.5 million per year, starting in 2011.
"We are pleased to have identified an immediately accretive
renewable power acquisition that further enhances the geographic
diversification of our assets," commented Barry Welch, President
and CEO of Atlantic Power. "The current acquisition market in both
renewable and natural gas-fired electric power assets will continue
to provide opportunities to execute on our growth strategy."
The acquisition brings a number of benefits to Atlantic Power's
shareholders, as it:
-- Will be immediately accretive to cash flow;
-- Has demonstrated an excellent operational history, including an
availability factor which has averaged 93% since 2006;
-- Has a long-term power purchase agreement through 2028, which will
further extend the average contract life of our portfolio;
-- Has contract capacity payments that comprise approximately half of the
project's revenue;
-- Has developed a broad, reliable network of fuel suppliers, approximately
75% of which have provided fuel to the plant since inception; and
-- Benefits from a favorable state regulatory climate that provides
incentives for biomass projects.
About Atlantic Power
Atlantic Power Corporation is an independent power producer with
power projects located in major markets in the United States. The
Company's current portfolio consists of interests in 12 operational
power generation projects across eight states, a 500 kilovolt
84-mile electric transmission line located in California, one wind
project under construction in Idaho, one biomass project under
construction in Georgia, and a number of development projects in
five states. The Company's power generation projects in operation
have an aggregate gross electric generation capacity of
approximately 1,823 megawatts (or "MW"), in which the Company's
ownership interest is approximately 808 MW. For more information,
please visit the Company's website at www.atlanticpower.com.
Forward-Looking Statements
When used in this news release, the words "anticipate",
"expect", "project", "believe", "estimate", "forecast" and similar
expressions are intended to identify forward-looking statements,
which include statements relating to the acquisition of Cadillac,
the anticipated financial and operational performance of Cadillac
and the expectation that the current acquisition market will
continue to provide opportunities to execute our growth
strategy.
Such forward-looking statements are based on a number of
assumptions which may prove to be incorrect, including, but not
limited to the ability of the Company to complete the acquisition
of Cadillac, the ability of the Company to satisfy conditions under
the purchase agreement and the anticipated financial and operating
performance of Cadillac. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The
forward-looking statements contained in this news release represent
our expectations as of the date of this press release and,
accordingly, are subject to change after such date. Except as
required by applicable law, we disclaim any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Contacts: Atlantic Power Corporation Patrick Welch (617)
977-2700 info@atlanticpower.com
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