Long-term average annual production increases by 8% and net installed
capacity increases by 5%
Proceeds of the private placement will fund recently announced
Innergex signs a letter of intent to acquire 6 more sites in Quebec and
The Corporation also announces its decision to implement a DRIP
LONGUEUIL, QC, July 26, 2012 /CNW Telbec/ - Innergex Renewable Energy
Inc. (TSX: INE) ("Innergex" or the "Corporation") announces it has
signed a purchase and sale agreement to acquire from the Hydromega
Group of Companies ("Hydromega") its 70% interest in the Magpie
hydroelectric facility located in the Minganie RCM, in Northeastern
The Corporation has also signed a letter of intent with Hydromega with
respect to the acquisition of its ownership interest in six other
sites, including one 30.5 MW hydroelectric facility in Quebec, four
hydroelectric projects under construction totaling 22.0 MW in Ontario,
and one 10.0 MW hydroelectric project under development, also in
Concurrent with this acquisition, the Corporation has closed a private
placement with the Caisse de dépôt et placement du Québec and one other
institutional investor, to issue a total of 12,040,499 common shares at
a price of $10.27 per share, for gross proceeds of $123.7M. These funds
will be used to finance the acquisition of the Magpie facility, as well
as other acquisitions announced recently by the Corporation.
"Innergex continues to execute its strategy of expanding its long-term
production and strengthening its growth prospects, creating a balanced
mix of sites in operation and projects under development across Canada"
said Michel Letellier, President and Chief Executive Officer of the
Corporation. "Today's acquisition immediately strengthens our ability
to generate additional cash flows in support of a sustainable dividend
to our shareholders."
Mr. Letellier declared he was pleased and honoured to have concluded a
private placement with the Caisse de dépôt et placement du Québec and
one other institutional investor, adding that "we consider their
investment as recognition of our accomplishments and a vote of
confidence in our long-term growth prospects."
The Corporation expects the acquisition of Magpie to close by September
30, 2012, subject to regulatory approvals and other customary closing
Description of assets to be acquired
Magpie hydroelectric facility
Innergex will acquire Hydromega's 70% interest in Magpie, a 40.6 MW
run-of-river hydroelectric facility located on Crown lands in the
Minganie Regional County Municipality, in Northeastern Quebec. This
facility commenced commercial operations in 2007, and all of the
electricity it produces is sold to Hydro-Québec under a 25-year power
purchase agreement. Magpie has an average annual production of
approximately 185,000 MWh, enough to power almost 11,000 Quebec
households. It is expected to generate annualized revenues of
approximately $10.0M in 2012, including payments received under the
The cost of this acquisition will be approximately $30.3M, plus the
assumption of approximately $52.0M in project-level debt which carries
a blended interest rate of 6.35% and is amortized over a 24-year term
maturing in 2031.
Letter of intent to acquire 6 additional hydroelectric sites in Quebec
Concurrent with the acquisition of Magpie, the Corporation has signed a
letter of intent with Hydromega with respect to the acquisition of its
ownership interest in six other run-of-river hydroelectric sites.
One operating facility in Quebec: The Sainte-Marguerite facility located near Sept-Iles, Quebec has an
installed capacity of 30.5 MW. All of the electricity it produces is
sold to Hydro-Québec under two power purchase agreements, one of which
expires in 2018 (for 8.5 MW) and the other which expires in 2027 (for
22.0 MW). Both are renewable for an additional 25-year term. Hydromega
has a 100% ownership interest in this facility.
Four projects under construction in Ontario: The Big Beaver Falls, Camp Three Rapids, White Otter Falls, and Old
Woman Falls projects located near Kapuskasing, Ontario will have a
total installed capacity of 22.0 MW. All of the electricity they will
produce will be sold to the Ontario Power Authority under 40-year power
purchase agreements. The Big Beaver Falls and Camp Three Rapids
projects are expected to reach commercial operation by the end of 2012;
Hydromega owns an 80% ownership interest in these projects. The White
Otter Falls and Old Woman Falls projects are expected to reach
commercial operation early in 2013; Hydromega owns an 80% and a 75%
ownership interest, respectively in these projects.
One project under development in Ontario: The Dokis hydroelectric project located near Dokis, Ontario will have
a total installed capacity of 10.0 MW. All of the electricity it will
produce will be sold to the Ontario Power Authority under a 40-year
power purchase agreement. This project is expected to begin
construction in 2012 and reach commercial operation in 2014; Hydromega
owns a 60% ownership interest in this project.
As part of the transaction to acquire Magpie, the Corporation has signed
a deposit agreement in the amount of $25.0M, payable immediately to
Hydromega. This amount will constitute an advance on the total
consideration paid to acquire Magpie or other Hydromega assets.
Furthermore, the deposit agreement contains a right of first offer for,
as well as an option to acquire, the Sainte-Marguerite facility.
Mr. Jacky Cerceau, President and CEO of Hydromega, explains his
company's decision in these words: "Since 1987, Hydromega, a private
company, has successfully developed several hydroelectric projects,
first in Quebec and more recently in Ontario. After 25 years, Hydromega
found itself at a crossroads in order to continue its activities and
finance projects which have become increasing costly, having to choose
between becoming a publicly-traded company and joining a public company
already active in the renewable energy sector. We are very pleased to
have chosen the latter. This decision was natural for us, given
Innergex's leadership position in the Quebec market, shared values, and
impressive portfolio of projects and growth prospects. After completing
the sale of Magpie, we fully intend to complete the transaction
involving the transfer of our remaining assets."
$123.7M private placement of common shares
The Caisse de dépôt et placement du Québec and one other institutional
investor have agreed to acquire by way of private placement 9,632,399
and 2,408,100 common shares, respectively at a price of $10.27 per
share, for gross proceeds of $123.7M.
The proceeds of this private placement will be used to finance the
acquisition of the Magpie hydroelectric facility, as well as other
acquisitions announced recently by the Corporation, including the Brown
Lake and Miller Creek hydroelectric facilities (see the June 14, 2012
press release) and the Wildmare wind energy project (see July 26, 2012
The issuance of common shares pursuant to this private placement is
subject to customary approvals of applicable securities regulatory
authorities, including the TSX. Furthermore, these shares will be
subject to a statutory four-month hold period.
Implementation of a dividend reinvestment plan ("DRIP")
The Corporation's board of directors recently approved the
implementation of a dividend reinvestment plan for its shareholders.
Terms and conditions of the plan will be finalized over the coming
The Caisse de dépôt et placement du Québec has indicated it will
register a minimum of 50% of its shares under the DRIP, for a period of
Conference call and webcast Thursday July 26 at 11:00 a.m. EDT
Innergex will host a conference call and webcast on Thursday, July 26,
2012 at 11:00 a.m. EDT, during which Mr. Michel Letellier, President
and Chief Executive Officer will discuss the details of several recent
acquisitions and the $123.7M private placement of common shares.
A replay of the conference call will be available until August 2, 2012,
at midnight EDT. To access the replay, dial 1 855 859-2056 and enter
the identification number 12434700, followed by the pound sign (#).
A replay of the webcast will be available on the Corporation's website
at www.innergex.com. The presentation will be available to download from the Corporation's
website after the webcast.
About Innergex Renewable Energy Inc.
Innergex Renewable Energy Inc. (TSX: INE) is a leading Canadian independent renewable power producer.
Active since 1990, the Company develops, owns, and operates
run-of-river hydroelectric facilities, wind farms, and solar
photovoltaic farms and carries out its operations in Quebec, Ontario,
British Columbia, and Idaho, USA. Its portfolio of assets currently
consists of: (i) interests in 26 operating facilities with an aggregate
net installed capacity of 494 MW (gross 880 MW), including 20
hydroelectric operating facilities, five wind farms, and one solar
photovoltaic farm; (ii) interests in 9 projects under development or
under construction with an aggregate net installed capacity of 231 MW
(gross 374 MW), for which power purchase agreements have been secured;
and (iii) prospective projects with an aggregate net capacity totaling
2,904 MW (gross 3,127 MW). Innergex Renewable Energy Inc. is rated BBB-
by S&P and BBB (low) by DBRS.
The Corporation's strategy for building shareholder value is to develop
or acquire high-quality facilities generating sustainable cash flows
and providing a high return on invested capital, and to distribute a
Forward-Looking Information Disclaimer
This press release contains forward-looking information within the
meaning of securities legislation. All information and statements other
than statements of historical facts contained in this press release are
forward-looking information. Such statements and information may be
identified by looking for words such as "about", "approximately",
"may", "believes", "expects", "will", "intend", "should", "plan",
"predict", "potential", "project", "anticipate", "estimate", "continue"
or similar words or the negative thereof or other comparable
terminology. Such forward-looking information includes, without
limitation, statements with respect to the anticipated closing of the
acquisition of the Magpie facility and the potential acquisition of six
additional hydroelectric sites from Hydromega, benefits which may
accrue to Innergex and its shareholders as a result of the contemplated
acquisitions, power generation, growth prospects, power purchase
renewal, commercial operation date, average annual electricity
production, construction costs, project financing, business strategy
and plans and objectives of or involving Innergex or projects subject
to the contemplated acquisitions.
The forward-looking information includes forward-looking financial
information or financial outlook, such as estimated electricity
production and projected revenues to inform investors of the potential
financial impact of the contemplated acquisitions on the Corporation's
results. Such information may not be appropriate for other purposes.
The forward-looking information is based on certain key expectations and
assumptions made by Innergex as of the date of this press release,
including expectations and assumptions concerning satisfaction of all
conditions of closing, availability of capital resources, commercial
operation dates, and performance of operating facilities, estimates,
forecasts and opinions of the Corporation. Although Innergex believes that the expectations and assumptions on
which such forward-looking information is based are reasonable, undue
reliance should not be placed on the forward-looking information since
no assurance can be given that they will prove to be correct. Actual
results could differ materially from those currently anticipated due to
a number of factors and risks and there can be no assurance that the
proposed acquisitions will occur. These include, but are not limited to
failure to close the contemplated acquisitions or enter into a
definitive agreement in respect thereto, potential undisclosed
liabilities associated with the potential acquisitions, failure to
realize the benefits of the potential acquisitions (including cost
synergies and operational efficiencies), energy generation, power
purchase agreement renewal, equipment failure, development and
construction of the new facilities, performance of third-party
suppliers and other risks generally attributable to the business of
Innergex. For additional information with respect to risks and
uncertainties, refer to the Annual Information Form of Innergex filed
on SEDAR's website at www.sedar.com. The forward-looking information contained herein is made as of the
date of this press release and the Corporation does not undertake any
obligation to update or revise any forward-looking information, whether
as a result of events or circumstances occurring after the date hereof,
unless required by legislation.
SOURCE: INNERGEX RENEWABLE ENERGY INC.
For further information:
Jean Trudel, MBA
Chief Investment Officer and
Senior Vice-President - Communications
450-928-2550, ext. 252
Marie-Josée Privyk, CFA
Director - Investor Relations
450-928-2550, ext. 222