/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO
ANY UNITED STATES NEWS SERVICE/
EDMONTON, Oct. 13 /CNW/ - (TSX: EP.UN) - EPCOR Power L.P. (collectively with its subsidiaries, the "Partnership") and EPCOR Power Equity Ltd. (the "Issuer" or the "Corporation") announced today that EPCOR Power Equity Ltd. will issue 4,000,000 Cumulative Rate Reset Preferred Shares, Series 2 (the "Series 2 Shares") at a price of $25.00 per share, for aggregate gross proceeds of $100 million (the "Offering") on a bought deal agreement basis to a syndicate of underwriters in Canada led by CIBC World Markets Inc. and Scotia Capital Inc.
The Series 2 Shares will pay fixed cumulative dividends of $1.75 per share per annum, yielding 7.0% per annum, payable on the last business day of March, June, September and December of each year, as and when declared by the board of directors of the Corporation, for the initial five-year period ending December 31, 2014. The first quarterly dividend of $0.28288 per share is expected to be paid on December 31, 2009. The dividend rate will reset on December 31, 2014 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 4.18%. The Series 2 Shares are redeemable by the Corporation on December 31, 2014 and on December 31 every five years thereafter.
The holders of Series 2 Shares will have the right to convert their shares into Cumulative Floating Rate Preferred Shares, Series 3 (the "Series 3 Shares") of the Corporation, subject to certain conditions, on December 31, 2014 and on December 31 of every fifth year thereafter. The holders of Series 3 Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the board of directors of the Corporation, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate and 4.18%.
The Partnership will fully and unconditionally guarantee the payment of dividends, as and when declared, the amounts payable on a redemption of the Series 2 Shares or Series 3 Shares for cash and the amounts payable in the event of the liquidation, dissolution and winding up of the Issuer.
The offering is expected to close on or about November 2, 2009, subject to certain conditions, including conditions set forth in the underwriting agreement. The net proceeds will be used to repay outstanding bank indebtedness.
The Series 2 Shares will be offered for sale by way of a short form prospectus of the Issuer in all provinces and territories of Canada. Only persons who are residents of Canada, or if partnerships are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada), may purchase Series 2 Shares under the Offering.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States of America or to U.S. persons. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States.
About EPCOR Power Equity Ltd.
The Corporation was incorporated under the laws of the Province of Alberta on June 26, 1998 and is a wholly-owned subsidiary of the Partnership. The Corporation operates as a holding company and indirectly holds all of the Partnership's business and power generation and other assets in the United States, including the Partnership's Curtis Palmer, Manchief, Frederickson, Naval Station, North Island, Naval Training Center, Oxnard, Greeley, Kenilworth, Roxboro, Southport and Morris power generating facilities. These facilities have a total generating capacity of approximately 1,080 megawatts (representing approximately 77 per cent of the total generating capacity of the Partnership's assets) and approximately four million pounds per hour of thermal energy (representing 100 per cent of the total thermal energy capacity of the Partnership's assets).
About EPCOR Power L.P.
Established in 1997, EPCOR Power L.P. is a limited partnership organized under the laws of the Province of Ontario. The Partnership's portfolio includes 19 wholly-owned power generation assets located in Canada and the United States and a 50 per cent interest in a power generation asset in Washington State. The Partnership's assets have a total net generating capacity of 1,400 megawatts and more than four million pounds per hour of thermal energy. For more information on the Partnership, please visit: www.epcorpowerlp.ca.
SOURCE EPCOR POWER L.P.
For further information: For further information: Media Inquiries: Mike Long, (780) 392-5207; Shareholder & Analyst Inquiries: Randy Mah, (780) 392-5305, Toll Free (866) 896-4636