Boralex Aquires Enercon's Interest in Niagara Region Wind Farm in Canada

$238.5 million have to be paid for the 230 MW Niagara Region Wind Farm (NRWF) to Enercon Canada Inc.

Extending across the Regional Municipality of Niagara, the Township of West Lincoln, the Town of Wainfleet and Haldimand County in Ontario, NRWF was commissioned on November 2, 2016 and comprises 77 state-of-the-art Enercon E-101 turbines. Upon the closing of the Transaction, NRWF will benefit from a 20-year feed-in tariff contract (the “FIT Contract”) with the province-owned IESO under attractive terms, which provide a predictable and recurring revenue and cash flow stream.

“We are thrilled to announce today the acquisition of Enercon’s economic interest in NRWF, an asset that we know well having coordinated its development, construction and commissioning with Enercon over the past two years. This Transaction is a great opportunity to further expand and diversify Boralex’s asset portfolio with a high quality wind farm that will provide a stable and recurring cash flow stream. Moreover, the Transaction is expected to create value for our shareholders with double-digit accretion to Boralex’s 2017 discretionary cash flow per share,” said Patrick Lemaire, President and Chief Executive Officer of Boralex.

Mr. Lemaire adds that “the financing strategy put in place to secure the Transaction will allow the Corporation to maintain significant financial flexibility to continue developing our high quality growth pipeline. Today, we remain ideally positioned to keep moving forward with our growth strategy focused on developing and acquiring assets associated with long term power purchase agreements and are pleased to announce the upward revision of our 2020 contracted capacity target from 1,650 to 2,000 MW. Considering the Corporation’s strong financial position and positive outlook for the long-term, we are also very pleased to announce an increase in our annual dividend to $0.60 per share, effective upon closing of the Transaction.”

Key Attributes of the Transaction

Boralex has for many years been dedicated to the Canadian renewable energy sector and, in particular, wind power. Consistent with this vision, Boralex has been committed to building on its significant presence and experience in Canada, including through acquisitions that are compatible with its position and goals in the market.

The acquisition of Enercon’s economic interest in NRWF will add 230 MW of clean energy to Boralex’s asset portfolio, increasing the Corporation’s net installed capacity by 21% to 1,338 MW. NRWF will become Boralex’s largest asset and will contribute to further extending its portfolio’s weighted average PPA term to 16 years.

On October 12, 2016, NRWF secured ring-fenced financings totalling $828.3 million from a club of international financial institutions. The financings consist of a $789.4 million 18-year term loan bearing interest at a rate of less than 4% and a $38.9 million letter of credit facility.

NRWF is expected to generate approximately $84 million in annual run-rate EBITDA(A) and the Transaction is expected to be double-digit accretive to 2017 discretionary cash flow per share.

Under the terms of the Transaction, Boralex will pay a cash consideration of $238.5 million to Enercon upon closing, subject to adjustments under the acquisition agreements. The Transaction replaces and supersedes the previous announcement on November 2, 2016 under which Boralex announced its intention to exercise its option to acquire a 25% economic interest in NRWF.

In addition to its cash on hand and availabilities under its existing revolving credit facility, the following financing sources will continue to preserve Boralex’s strong balance sheet and financing flexibility:

  • A $100 million increase to the existing revolving credit facility to $400 million. The Corporation’s credit facility will expire in 2020; and
  • A $150 million public equity offering of subscription receipts.
Boralex, Enercon Canada, Niagara Region Wind Farm, Canada, onshore

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