The transaction unlocks the value of AQN as a regulated Pure-Play tool
The proceeds expected to recapitalize the balance sheet and position the company for future growth
The company will hold its second quarter earnings conference call on 8:30 a.m. ET
OAKVILLE, ON, August 9, 2024 /PRNewswire/ – Algonquin Power & Utilities Corp . (TSX/NYSE: AQN) (“AQN” or the “Company”) announced today that it has entered into a definitive agreement to sell its renewable energy business (excluding hydro) to a wholly-owned subsidiary of LS Power (“Buyer”) for the total amount up to 2.5 billion dollars. All amounts are shown in United States dollars.
“We are pleased to announce this important transaction with LS Power, which is the result of a highly competitive strategic sale process,” said Chris HuskilsonCEO of AQN. “This major milestone, coupled with our previously announced agreement to support the sale of our Atlantica shares, realizes our plan to transform AQN into a regulated pure play service, to optimize our regulated activities of business, to strengthen our balance sheet and improve our quality of earnings We are confident that our path to a clean regulated gaming service supports our objective of creating long-term value for our customers and shareholders.
Mr. Huskilson concluded, “The renewable energy business is a compelling and competitive business with strong scale and assets. This strength is a direct result of the hard work and dedication of our employees over the past three decades, and I want to thank them for being an integral part of that effort. AQN and LS Power will work closely together to ensure a smooth transition.
Transaction details, approvals and closing time
ACTIvE August 9, 2024The company entered into an agreement to sell its renewable energy business (excluding hydro) to the buyer for a total consideration of up to 2.5 billion dollars excluding debt, consisting of 2.28 billion dollars of cash at closing (subject to certain closing adjustments) and up to 220 million dollars of cash pursuant to a gain agreement in respect of certain wind assets (the “Gain”). The purchase price represents a compelling value compared to other previous transactions. The transaction was unanimously approved by the Company’s board of directors.
The sale is subject to the satisfaction of customary closing conditions, including the approval of the US Federal Energy Regulatory Commission and approval under applicable competition laws. The Company expects the transaction to close in the fourth quarter of 2024 or the first quarter of 2025 and to receive estimated cash proceeds of approximately 1.6 billion dollars (excluding earnings) after repayment of construction financing, and net of taxes, transaction fees and other closing adjustments.
JP Morgan served as exclusive financial advisor to AQN in connection with the transaction.
Financial results of the second quarter
In a separate announcement issued today, the Company announced financial results for the completed second quarter June 30, 2024. The earnings conference will be held at 8:30 AM ET on FridayAugust 9, 2024, by the Chief Executive Officer, Chris Huskilsonand Chief Financial Officer, Darren Myers.
About Algonquin Power & Utilities Corp. and Liberty
Algonquin Power & Utilities Corp., Liberty’s parent company, is a diversified international generation, transmission and distribution company with approx. 18 billion dollars of total assets. AQN is committed to providing safe, secure, reliable, cost-effective and sustainable energy and water solutions through its investment portfolio of generation, transmission and distribution services to over one million customer connections, primarily in United States AND Canada. In addition, AQN owns, operates and/or has net interests in over 4 GW of installed renewable energy capacity. AQN’s common shares, preferred shares, Series A and preferred shares, Series D are listed on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A and AQN.PR.D, respectively. AQN common stock and the Series 2019-A subordinated notes are listed on the New York Stock Exchange under the symbols AQN and AQNB, respectively.
Visit AQN at www.algonquinpower.com and follow us on X.com @AQN_Utilities.
Caution Regarding Forward-Looking Information
Certain statements contained in this news release constitute “forward-looking information” within the meaning of the applicable securities laws of each of the provinces and territories of Canada and related policies, regulations and rules under such laws and “forward-looking statements” within the meaning of the US Securities and Exchange Reform Act of 1995 (collectively, “forward-looking statements”). The words “will” and “expects” (and grammatical variations of such terms) and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these specific identifying words, but are, without limitation, such statements regarding the sale of the Company’s renewable energy business (excluding hydropower), including the expected timing, revenue and impact on the Company or projection, including assumptions based on historical trends, current conditions and expected developments in the future. AQN cautions that although the assumptions are believed to be reasonable under the circumstances, these risks and uncertainties create the possibility that actual results could differ materially from the expectations set forth in the forward-looking statements. There can be no assurance that the sale of the Company’s renewable energy business will occur on the terms currently contemplated or otherwise, or that any of the intended benefits and purposes of such transaction will be realized. The forward-looking statements contained herein are provided for the purpose of assisting in understanding the Company and its business, operations, risks, financial performance, financial position and cash flows as of and for the periods indicated and to present information regarding expectations and management’s current plans relating to the future and such information may not be suitable for other purposes. Material risk factors and assumptions include those set forth in AQN’s Annual Information Form and Annual Management Discussion and Analysis for the year ended December 31, 2023and Management’s Discussion and Analysis for the three and six months ended June 30, 2024each of which is or will be available on SEDAR+ and EDGAR. Given these risks, undue reliance should not be placed on these forward-looking statements, which speak only as of their dates. Except as specifically required by law, AQN undertakes no obligation to update any forward-looking statement to reflect new, subsequent or other information.
SOURCE Algonquin Power & Utilities Corp.
