Atlantic Power Announces Closing of Cadillac Renewable Energy Acquisition
December 20 2010 - 2:27PM
Business Wire
Atlantic Power Corporation (TSX: ATP) (NYSE: AT) (“Atlantic
Power” or the “Company”) announced today that it has closed the
previously announced acquisition of 100% of the membership
interests in Cadillac Renewable Energy, LLC (“Cadillac”), a 39.6 MW
wood fired facility located in Cadillac, Michigan.
The purchase price was $77 million, plus customary working
capital adjustments, and was funded by $34 million of cash on hand
and $43 million of assumed non-recourse, project-level debt. The
assumed non-recourse debt amortizes fully over the term of the
power purchase agreement (“PPA”). Operations and maintenance will
be managed by Rollcast Energy, Atlantic Power’s majority-owned
affiliate. The Company expects to receive distributions from the
project in the range of $3.5 million to $4.5 million per year,
starting in 2011.
The acquisition brings a number of benefits to Atlantic Power’s
shareholders, as it:
- Is immediately accretive to cash
flow;
- Has demonstrated an excellent
operational record, including an availability factor which has
averaged 93% since 2006;
- Extends the average contract life of
our portfolio due to its long-term power purchase agreement through
2028 with Consumers Energy Company;
- 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 nine 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 1,778 megawatts (or "MW"), in which the Company’s
ownership interest is approximately 828 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 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 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.
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