Emera ups investment in Algonquin Power8/1/2012
Emera Inc. has upped its stake in an Ontario green energy company with a $45-million investment.
“It’s a way to broaden our strategic footprint, a way to grow,” Jill MacDonald, Emera’s manager of investor relations, said in an interview Tuesday.
Emera, parent company of Nova Scotia Power Inc., said Tuesday it has exchanged previously acquired subscription receipts for 6.977 million common shares of Algonquin Power and Utilities Corp. The price was $6.45 per common share.
The exchange gives Emera a total of 30.11 million Algonquin common shares, or 17.85 per cent of Algonquin’s issued and outstanding shares.
The subscription receipts were acquired last Friday in connection with the previously announced acquisition of United States gas distribution assets by Algonquin’s regulated utility subsidiary. The plan received regulatory approval in June.
Algonquin will use proceeds from the subscription receipt conversion to help fund the gas-distribution-asset acquisition, expected to be completed in the third quarter.
Emera also holds 8.211 million subscription receipts exchangeable for Algonquin common shares in connection with Algonquin’s purchase of Emera’s 49.999 per cent interest in California Pacific Electric Co., LLC.
The Calpeco receipts are exchangeable for common shares of Algonquin on a one-for-one basis in two tranches — 4.790 million shares after regulatory approval of the ownership transfer and the balance after completion of Calpeco’s first rate case, expected in 2013.
Regulatory approval of the transfer has been received and it is expected the first tranche of subscription receipts related to that transaction will be exercised in the third quarter.
Emera also holds 7.84 million subscription receipts — at a purchase price of $5.74 per receipt (the 2012 subscription receipts) — in connection with the acquisition by Algonquin’s power generation subsidiary of a 51 per cent interest in a 480-megawatt U.S. wind power portfolio.
If all of the 7.84 million common shares that may be issued pursuant to the 2012 subscription receipts and the 8.211 million common shares issuable pursuant to the Calpeco subscription receipts are issued, Emera would own about 25 per cent of Algonquin’s issued and outstanding shares.
The acquisition of Algonquin shares is subject to regulatory approval from the Maine Public Utilities Commission, since Emera and Algonquin have operations in the state.
The commission has limited Emera’s ownership in Algonquin to 20 per cent, with any additional investment requiring specific approval.
Emera requested commission approval on June 25 to increase its ownership in Algonquin to 25 per cent.
Emera said the common shares acquired Tuesday are for investment purposes and it has no intention of acquiring control of Algonquin.
(The Chronicle Herald)