BOSTON, Feb. 16, 2012 /PRNewswire/ -- Atlantic Power Corporation (the "Company") today announced that it has entered into an agreement with Primary Energy Recycling Corporation ("Primary Energy" or "PERC"), whereby PERC will purchase the Company's 7,462,830.33 common membership interests in Primary Energy Recycling Holdings, LLC ("PERH") (14.3% of PERH total interests) for approximately US$24 million, plus a management termination fee of approximately US$6.1M for a total price of US$30.1 million. The agreed upon price for the Company's private interest in PERH was established on December 19, 2011 and represented a 16% discount to the 60 day volume weighted average trading price of Primary Energy's common shares at that time. The transaction remains subject to pricing adjustment or termination under certain circumstances. Completion of the transaction is subject to PERC obtaining financing.
"Our minority interest in Primary Energy was acquired when Atlantic purchased CPILP, and the sale of our position reflects our focus on optimizing our current portfolio and selling positions that are not core to our business," said Barry Welch, President and CEO of Atlantic Power. "Primary Energy approached us with an offer and we viewed it as an opportunity to rationalize our portfolio. The Primary projects are different from the rest of our portfolio and we did not think there were adequate operational synergies to maintain our position."
On closing of the transaction, the management agreement, under which an indirect subsidiary of Atlantic Power provides certain operational and administrative services to PERC and its subsidiaries, will be terminated on payment of a termination fee as specified in the management agreement. If closing occurs as expected in April 2012, Primary Energy will pay the Company a US$6.1 million fee to terminate the management agreement. The Company intends to use the proceeds from the sale of its interest in PERH to pay down our revolving credit facility creating headroom to finance future growth opportunities.
About Atlantic Power
Atlantic Power is a leading publicly traded, power generation and infrastructure company with a well diversified portfolio of assets in the United States and Canada. Our power generation projects sell electricity to utilities and other large commercial customers under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. The net generating capacity of the Company's projects is approximately 2,140 MW, consisting of interests in 31 operational power generation projects across 11 states and 2 provinces, one 53 MW biomass project under construction in Georgia, and an 84-mile, 500 kilovolt electric transmission line located in California. Atlantic Power also owns a majority interest in Rollcast Energy, a biomass power plant developer in Charlotte, NC. Atlantic Power is incorporated in British Columbia, headquartered in Boston and has offices in Chicago, Toronto, Vancouver and San Diego.
Our corporate strategy is to generate stable, contracted cash flows from our existing assets to sustain our dividend payout to shareholders while increasing the value of the company through accretive acquisitions in North American markets. Our dividend is currently paid monthly at an annual rate of Cdn$1.15 per share.
Atlantic Power has a market capitalization of approximately $1.6 billion and trades 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
Amanda Wagemaker, Investor Relations
Certain statements in this news release may constitute "forward-looking statements," which reflect the expectations of the Company regarding the sale of its membership interests in PERC at an agreed upon price, which is subject to adjustment or termination under certain circumstances. Such forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the assumption that Primary Energy will obtain financing and that the transaction will close in April 2012.
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, events will occur. In addition to the assumptions described above, reference should also be made to the factors discussed under "Risk Factors" in the Company's proxy dated October 3, 2011. 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.
SOURCE Atlantic Power Corporation