Pattern Energy Announces Agreements to Acquire Henvey Inlet and Grady Wind Facilities
- Entered into an Agreement for a
$293 million1 acquisition of two operating wind facilities with 20- and 25-year power purchase agreement ("PPA") contract terms, in line with business plan. In addition, Pattern Energywill assume the project finance loans, or tax equity, for the individual projects and purchase a C$97 millionloan made to Nigig Power Corporation(" Nigig Power"), a subsidiary of the Henvey Inlet First Nation, the partner in the Henvey Inlet Wind project.
- At a 10x multiple of the five-year average cash available for distribution2, the acquisitions significantly contribute to the Company's 2019/2020 growth objectives.
- 520 MW operating capacity (251 MW owned capacity) purchased from
Pattern Energy Group LP(" PEG LP") and Pattern Energy Group2 LP (" Pattern Development").
- Attractive placement of
$260 millionfor 10.4 million shares of Series A Preferred Stock with an initial base dividend of 5.625% plus an additional contingent dividend based upon sharing of distributions, subject to a cap, received from Pattern Energy's29.3% ownership in Pattern Development.
USD to CAD exchange rate of $1.30.
This forward looking measure of five-year average annual purchase price multiple of cash available for distribution (CAFD) contribution from the Henvey Inlet Wind and Grady Wind facilities is a non-GAAP measure that cannot be reconciled to net cash provided by operating activities as the most directly comparable GAAP financial measure without unreasonable effort primarily because of the uncertainties involved in estimating forward-looking changes in working capital balances which are added to earnings to arrive at cash provided by operations and subtracted therefrom to arrive at CAFD. A description of the adjustments to determine CAFD can be found within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Metrics, of Pattern Energy's 2018 Annual Report on Form 10-K.
"These acquisitions increase our portfolio by 13% to 4.4 gigawatts of operational capacity across 28 renewable energy facilities," said
Overview of Acquisitions
As part of the acquisition,
The Company intends to use the
Upon declaration by the Company's Board of Directors, the Series A Preferred Stock will pay cumulative cash dividends at an annual rate of 5.625% (the "Base Dividend"), based on the
Shares of the Series A Preferred Stock are entitled to receive as an additional contingent dividend, 12.6% of distributions made by
The Series A Preferred Stock is non-callable until 2024 after which it is convertible by the Company into Common Stock or cash at the Company's election subject to a 101% premium to the liquidation preference. The Company does not intend to redeem the security and if redeemed intends to replace it with equity or an equity like instrument.
The Series A Preferred Stock is being offered only to certain institutional investors in a private placement under the Securities Act of 1933, as amended ("Securities Act"). The Series A Preferred Stock has not been registered under the Securities Act and may not be offered or sold absent registration or an applicable exemption from the registration requirements of the Securities Act. In
The placement of Series A Preferred Stock is subject to TSX approval, including conditional listing approval for the shares of Common Stock issuable in certain circumstances upon conversion of the Series A Preferred Stock. In obtaining TSX approval, the Company intends to rely on the "Eligible Interlisted Issuer" exemption from TSX rules under section 602.1 of the TSX Company Manual.
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities laws, including statements regarding, the ability to achieve the five year average CAFD multiple for the Henvey Inlet Wind and Grady Wind projects, the ability and timing to consummate the acquisition of the Henvey Inlet Wind project, the ability and timing to consummate the Series A Preferred Stock offering, the ability and timing to refinance the loan to
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Company's annual report on Form 10-K and any quarterly reports on Form 10-Q. The risk factors and other factors noted therein could cause actual events or the Company's actual results to differ materially from those contained in any forward-looking statement.
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