DEDHAM, Mass., July 3, 2018 /PRNewswire/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today that on June 29,
2018, it executed an agreement to acquire Covanta's 50.00%
interest in Koma Kulshan, a 13 megawatt run-of-the-river hydro
project located north of Seattle,
for $11.8 million. In addition,
the Company will buy out the operation and maintenance (O&M)
contract held by Covanta for $0.3
million. The transaction, which is not subject to any
regulatory approvals, is expected to close in the third quarter of
2018. Upon closing of the transaction with Covanta, Atlantic
Power will own 100% of the project and will become the project
operator.
The Koma Kulshan project has been in commercial operation since
October 1990. All of the output is sold to Puget Sound Energy
under a Power Purchase Agreement (PPA) that runs through March
2037. The project has two FERC hydro licenses, both of which
expire at the same time as the PPA. The project has no
debt.
The Company's existing 49.75% ownership interest in Koma Kulshan
is held through a partnership. Earlier in June 2018, the Company acquired the 0.25%
interest held by the managing general partner for $1.1 million. The acquisition eliminates the
payment of management fees to the general partner going
forward.
The total consideration of approximately $13.2 million represents a multiple of
approximately 10 times the Company's estimate of pro forma Project
Adjusted EBITDA and approximately 11 times the Company's estimate
of pro forma cash distributions. Both estimates are based on
average water conditions. The Company plans to fund the
acquisition from discretionary cash.
"This is an important milestone for Atlantic Power as it marks
the first external growth investment after a three-year business
restructuring process," said James J.
Moore, Jr., President and CEO of Atlantic Power. "We
view our hydro assets as having excellent near-term value and
strong long-term prospects, so we are pleased to acquire the
remaining interests in Koma Kulshan. By buying out the
O&M and management contracts as well, we will have 100%
ownership and operating control of a hydro project with a PPA that
has a 19-year remaining term."
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in nine states in the
United States and two provinces in Canada. The
generation projects sell electricity and steam to investment-grade
utilities and other creditworthy large customers predominantly
under long‑term PPAs that have expiration dates ranging from 2019
to 2037. The Company seeks to minimize its exposure to
commodity prices through provisions in the contracts, fuel supply
agreements and hedging arrangements. The projects are
diversified by geography, fuel type, technology, dispatch profile
and offtaker (customer). The majority of the projects in
operation are 100% owned and directly operated and maintained by
the Company. The Company has expertise in operating most fuel
types, including gas, hydro, and biomass, and it owns a 40%
interest in one coal project.
Atlantic Power's shares trade 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 the Company's financial data and other publicly filed
documents are available 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 Company's estimates of pro forma Project Adjusted EBITDA
and pro forma cash distributions for the acquired interests in the
Koma Kulshan project; and
- the Company's views of the value of its hydro assets, both
near- and long-term.
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
U.S. Securities and Exchange Commission (the "SEC") 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.
View original
content:http://www.prnewswire.com/news-releases/atlantic-power-corporation-announces-agreement-to-acquire-partner-interests-in-koma-kulshan-hydro-project-300675627.html
SOURCE Atlantic Power Corporation