Capital Power to sell 3 facilities to Emera
29 Aug 2013
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Capital Power said yesterday it will sell three New England merchant generation facilities to Emera Inc for $541 million.
The deal between the two merchant power plants, on Wednesday, gives Halifax, Nova Scotia-based Emera an increased scale within its core market, while it allows Capital Power to stabilise its earnings and refocus funds in its home province of Alberta.
Capital Power is a North American power producer headquartered in Edmonton, Alberta. The company develops and operates power generation from a variety of energy sources. Emera is an energy and services company with $7.8 billion in assets and 2012 revenues of $2.1 billion.
The transaction is consistent with our focus on enhancing Capital Power's returns for shareholders while rebalancing risk in our portfolio,'' said Capital Power President and CEO Brian Vaasjo, adding that the sale proceeds for the New England assets will be redeployed to reduce our merchant risk profile and provide more predictable earnings and cash flow.
''Our re-focusing reflects the fact that North American power markets have evolved over the past several years,'' Vaasjo continued.
The three facilities that are being agreed to be sold are Bridgeport Energy, a 520-megawatt power station in Bridgeport, Connecticut, which has been operational since 1999; Tiverton Power, a 265-megawatt power station in Tiverton, Rhode Island, which has been operational since 2000; and Rumford Power, a 265-megawatt power station in Rumford, Maine, which has been operational since 2000. The transaction includes certain emission credits.
The company said it would continue to pursue growth in contracted power generation across North America.
''Beginning in the first quarter of 2014, we expect the overall financial impact of the business refocusing, excluding the sale of the New England facilities themselves, to reduce annual expense spending by approximately $25 million to $30 million, boost annualised earnings per share by $0.20 to $0.25 and increase cash flow per share by approximately $0.25 to $0.30, net of the trading margins that would have been expected to be earned,'' said senior vice president and CFO Stuart Lee.
''Capital Power is now in a position to fully fund the remaining investment required for our 50% interest in the Shepard Energy Centre from proceeds from the New England sale, existing resources and future operating cash flows,'' said Lee.
Several power companies have recently begun to sell or spin off their merchant units to focus on their rate-based regulated operations, as power prices hover near their lowest in a decade.
Meantime, for Emera, the deal adds 1,050 megawatts to its generation capacity in a region it is very familiar.
The deal between the two merchant power plants, on Wednesday, gives Halifax, Nova Scotia-based Emera an increased scale within its core market, while it allows Capital Power to stabilise its earnings and refocus funds in its home province of Alberta.
Capital Power is a North American power producer headquartered in Edmonton, Alberta. The company develops and operates power generation from a variety of energy sources. Emera is an energy and services company with $7.8 billion in assets and 2012 revenues of $2.1 billion.
The transaction is consistent with our focus on enhancing Capital Power's returns for shareholders while rebalancing risk in our portfolio,'' said Capital Power President and CEO Brian Vaasjo, adding that the sale proceeds for the New England assets will be redeployed to reduce our merchant risk profile and provide more predictable earnings and cash flow.
''Our re-focusing reflects the fact that North American power markets have evolved over the past several years,'' Vaasjo continued.
The three facilities that are being agreed to be sold are Bridgeport Energy, a 520-megawatt power station in Bridgeport, Connecticut, which has been operational since 1999; Tiverton Power, a 265-megawatt power station in Tiverton, Rhode Island, which has been operational since 2000; and Rumford Power, a 265-megawatt power station in Rumford, Maine, which has been operational since 2000. The transaction includes certain emission credits.
The company said it would continue to pursue growth in contracted power generation across North America.
''Beginning in the first quarter of 2014, we expect the overall financial impact of the business refocusing, excluding the sale of the New England facilities themselves, to reduce annual expense spending by approximately $25 million to $30 million, boost annualised earnings per share by $0.20 to $0.25 and increase cash flow per share by approximately $0.25 to $0.30, net of the trading margins that would have been expected to be earned,'' said senior vice president and CFO Stuart Lee.
''Capital Power is now in a position to fully fund the remaining investment required for our 50% interest in the Shepard Energy Centre from proceeds from the New England sale, existing resources and future operating cash flows,'' said Lee.
Several power companies have recently begun to sell or spin off their merchant units to focus on their rate-based regulated operations, as power prices hover near their lowest in a decade.
Meantime, for Emera, the deal adds 1,050 megawatts to its generation capacity in a region it is very familiar.
