Northland Power Income Fund Announces $65 Million Offering Of Trust Units
2/11/03
Northland Power Income Fund (TSX: NPI.UN) ('Northland Power'or the 'Fund') announced today that it has entered into an agreement to sell to a group of underwriters led by CIBC World Markets Inc., 6,050,000 Trust Units at $10.75 per Trust Unit to raise gross proceeds of approximately $65 million. Northland Power has granted the Underwriters an option, exercisable in whole or in part until 30 days following the closing date, to purchase an additional 15% of the offering, on the same terms to cover any over-allotments. If the Over-allotment Option is exercised in full, the total gross proceeds of the financing will be approximately $75 million. The offering will be made in all provinces of Canada and is expected to close on March 5, subject to regulatory approval.
The net proceeds from the issue will be used by the Fund to repay the acquisition facility of approximately $42.5 million drawn upon to: (i) fund the purchase of a 25% interest in an operating cogeneration project near Kingston, Ontario, and (ii) to fund the acquisition of two new state-of-the-art General Electric gas turbines at the Fund's facility in Iroquois Falls, Ontario, and for other acquisitions. As a result of the natural gas turbine upgrades, it is expected the Fund will be able to benefit from higher output, increased efficiencies and cost savings, while also participating in emission credit sales, which are anticipated to start in 2004.
The transactions are expected to be accretive to unitholders, consistent with Northland Power's trust indenture, which stipulates that any transactions undertaken by the Manager of the Fund must be accretive while preserving the Fund's current risk profile.
This news release shall not constitute an offer to sell or a solicitation to buy the securities in any jurisdiction. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the 'U.S.
Securities Act'), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.
Northland Power Income Fund was established in 1997. The Fund owns a 110-megawatt cogeneration power plant in Iroquois Falls, Ontario and a 25% interest in a 110-megawatt cogeneration plant located near Kingston, Ontario. The facilities both supply electricity to Ontario Electricity Financial Corporation and steam to neighbouring industries under long-term contracts, and have long-term contracts for the supply and transportation of natural gas. |
