Brookfield To Sell Hydro & Wind Assets to Great Lakes Hydro

Brookfield Renewable Power Inc. (BRPI) announced that its Board of Directors has approved the sale to Great Lakes Hydro Income Fund of substantially all of its Canadian renewable power generation business not already owned by the fund. The projects include 15 hydroelectric plants with a total installed capacity of 387 megawatts (MW) and a soon-to-be-constructed wind power project.

As part of the deal, BRPI will also increase the price it currently pays for power generation from the fund’s existing Lièvre and Mississagi power assets. The reason for this is to reflect increases in power prices since the contracts were originally entered into, the company said. After completing the transaction, BRPI will continue to own 50% of the Great Lakes Hydro Income Fund.

The total consideration payable by the fund to BRPI in connection with the transaction is CAN $945 million. The funding will come from a number of place. The first will be $365 million in cash, payable out of the net proceeds of a $185 million bought-deal offering of subscription receipts and the net proceeds of a $195 million concurrent private placement of subscription receipts. The second will be a $200 million senior unsecured note of the fund to be issued to BRPI.

The transaction will also include issuance to BRPI of 25,562,500 trust units of the fund at a price equal to the weighted average price of the subscription receipts issued under the offering and the private placement (representing an aggregate of $380 million). 

“The proceeds from this sale will provide BRPI with additional capital to pursue highly promising investment opportunities in the rapidly growing renewable power sector,” said Harry Goldgut, Chairman of Brookfield Renewable Power. “As a result of the strategic repositioning and its 50% ownership of the fund, Brookfield expects to benefit from a stronger renewable power platform, greater access to capital and significant growth opportunities.”

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