EPCOR Power L.P. announces $105 million offering of limited partnership units
EDMONTON, Alberta - May 23, 2007 (TSX: EP.UN) - EPCOR Power L.P. (collectively with its subsidiaries, the "Partnership") announced today that it has entered into an agreement with TD Securities Inc. and CIBC World Markets Inc., as co-book runners, on behalf of a syndicate of underwriters. Under the agreement, the underwriters have agreed to purchase 4,015,297 limited partnership units ("Units") from the Partnership for sale to the public at a price of $26.15 per unit, for aggregate gross proceeds of $105,000,017 (the "Offering").
The net proceeds from the Offering together with net proceeds from the previously announced offering of preferred shares of EPCOR Power Equity Ltd., a subsidiary of the Partnership, will be used by the Partnership to repay all amounts outstanding under the bridge acquisition credit facility due in October 2007, and a portion of the bridge acquisition credit facility due in October 2009, all incurred in conjunction with the Partnership's acquisition of Primary Energy Ventures LLC ("PEV") in November 2006. The Offering is expected to close on May 31, 2007.
"This Unit issuance will complete our equity financing for the acquisition of PEV," said Stuart Lee, CFO, EPCOR Power Services Ltd. "We plan on refinancing the balance of the PEV acquisition on a permanent basis through the issue of long-term debt."
EPCOR Utilities Inc., through wholly-owned subsidiaries ("EPCOR"), has agreed to purchase 1,228,681 Units under the Offering from the underwriters at the same price as offered to the public to maintain its 30.6% interest in the Partnership.
Dominion Bond Rating Services ("DBRS") and Standard and Poor's Rating Services ("S&P") have assigned a stability rating of STA-2 (high) and SR-2 (stable) to the Partnership's Units, respectively. The Partnership's long-term debt is rated at BBB (high) with a stable trend and BBB+ (stable) by DBRS and S&P, respectively.
The Units will be offered for sale by way of a prospectus supplement to the base shelf prospectus of the Partnership dated June 15, 2006 in all provinces and territories of Canada. Only persons who are residents of Canada, or, if partnerships, are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) and the regulations promulgated thereunder may purchase or own Units.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States of America or to U.S. persons. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States.
About EPCOR Power L.P.
Established in 1997, EPCOR Power L.P. is a limited partnership organized under the laws of the Province of Ontario. The Partnership wholly owns and operates a portfolio of 20 power generation assets in Canada and the United States with total net generating capacity of 1,287 megawatts and more than three million pounds per hour of thermal energy. The Partnership also owns a 15.4 per cent interest in Primary Energy Recycling Holdings LLC ("PERH"). PERH wholly owns four recycled energy assets in the United States with an aggregate generation capacity of 284 megawatts and nearly two million pounds per hour of thermal energy, and holds a 50 per cent interest in a pulverized coal facility. PEV, a wholly owned subsidiary of the Partnership, manages and operates these facilities for PERH. The Partnership's web-site is http://www.epcorpowerlp.ca/
FORWARD-LOOKING INFORMATION
Certain information in this news release is forward-looking and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target", "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Partnership's actual results and experience to be materially different than the anticipated results. Such risks, assumptions and uncertainties include, but are not limited to, the ability of the Partnership to successfully integrate and realize the financial benefits of acquisitions, the ability of the Partnership to implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, plant availability, waste heat availability and water flows, regulatory and government decisions, the renewal and terms of power purchase contracts, competitive factors in the power industry, the current and future economic conditions in North America and the performance of contractors and suppliers.
Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, the Partnership disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
Media inquiries: Tim LeRiche (780) 412-8817
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