Pattern Energy Group will acquire ownership interests in two operating wind power facilities, the Henvey Inlet Wind facility in Ontario and the Grady Wind facility in New Mexico. The company has also entered into an agreement for a $260 million private placement of perpetual preferred stock (Series A Preferred Stock) with certain institutional investors and intends to use a portion of the net proceeds to finance the two acquisitions.
- $293 million acquisition of two operating wind facilities with 20- and 25-year power purchase agreement contract terms, in line with business plan. In addition, Pattern Energy will assume the project finance loans, or tax equity, for the individual projects and purchase a C$97 million loan made to Nigig Power Corporation, a subsidiary of the Henvey Inlet First Nation, the partner in the Henvey Inlet Wind project.
- At a 10-times multiple of the five-year average cash available for distribution, the acquisitions significantly contribute to the company’s 2019/2020 growth objectives
- 520 MW operating capacity (251 MW owned capacity) purchased from Pattern Energy Group LP and Pattern Energy Group 2 LP.
- Attractive placement of $260 million for 10.4 million shares of Series A Preferred Stock with an initial base dividend of 5.625% plus an additional contingent dividend based upon sharing of distributions, subject to a cap, received from Pattern Energy’s 29.3% ownership in Pattern Development.
“These acquisitions increase our portfolio by 13% to 4.4 GW of operational capacity across 28 renewable energy facilities,” said Mike Garland, CEO of Pattern Energy. “The Henvey Inlet and Grady acquisitions are immediately accretive to CAFD per share with each facility characterized by strong cash flow profiles that are backed by long-term power contracts with investment-grade offtakers. The preferred stock offering enhances the Company’s financial flexibility and demonstrates our ability to attract institutional capital into our business. The preferred security offers an attractive alternative equity funding source that is accretive to our common shareholders.”
Pattern Energy is committing to pay C$242.4 million at closing to acquire 100% of PEG LP’s 50% equity ownership interest (equating to a 50% owned interest or 150 MW of owned capacity) in the 300-MW Henvey Inlet Wind facility. Following purchase price adjustments to be made at term conversion, the estimated economic cost to the company for such interest will be C$252 million. Nigig Power owns the remaining 50% interest in the facility. Henvey Inlet Wind is located on the northeast shore of the Georgian Bay in Ontario and commenced commercial operations in September 2019. The facility utilizes 87 Vestas 3.45-MW turbines and has a 20-year PPA with the Independent Electricity System Operator for 100% of its production. The acquisition is expected to close in the next 15 days.
Pattern Energy acquired 51% of Pattern Development’s Class B member interest in the 220-MW Grady Wind facility for $99.45 million for an owned interest of 101 MW. Grady Wind is located in Curry County, New Mexico and commenced commercial operations in the third quarter of 2019. The Public Sector Pension Investment Board (PSP Investments) is acquiring the remaining Class B member interest. The facility utilizes 84 Siemens Gamesa 2.625-MW turbines and has a 25-year PPA with Sacramento Municipal Utility District for 100% of its production up to 200 MW.
News item from Pattern