EDMONTON, Oct. 13 /CNW/ - EPCOR Power L.P. (TSX: EP.UN) (the Partnership) announced today a change in distribution frequency to monthly from quarterly and the launch of a Premium Distribution(TM) and Distribution Reinvestment Plan (the "Plan") that provides eligible unitholders with two alternatives to receiving the monthly cash distributions. The Plan has been designed to enhance the value unitholders receive from their investment in the Partnership.
The change to a monthly distribution will become effective immediately and replaces quarterly cash distributions that would otherwise be made. With the change to monthly distributions, cash distributions of the Partnership for periods commencing after September 30, 2009 will be made in respect of each calendar month instead of the quarters ending March, June, September and December of each year. The annual distributions are expected to remain at $1.76, in keeping with the Partnership's target of a long term payout ratio of approximately 75% of cash provided by operating activities less maintenance capital.
Under the Plan, eligible Unitholders may elect to either:
- Efficiently and cost-effectively accumulate additional units in the
Partnership by reinvesting cash distributions in additional units
issued at a 5% discount to the Average Market Price of such units (as
defined in the Plan) on the applicable distribution payment date; or
- Receive an additional 2% premium on their cash distributions,
resulting in a monthly cash distribution equivalent to 102% of the
Partnership's monthly cash distribution.
Participation in the Plan is optional. Eligible unitholders may elect to participate in the Plan commencing with the October monthly cash distribution that will be payable in November 2009 to unitholders of record on October 30, 2009.
Under the Premium Distribution(TM) component of the Plan, eligible unitholders direct that their cash distributions be reinvested in additional units issued from treasury at a 5% discount to the Average Market Price (as defined in the Plan) on the applicable distribution payment date. These units are then delivered to the designated plan broker in exchange for a cash payment equal to 102% of the cash distribution such unitholders would otherwise have received on the applicable distribution payment date. Canaccord Capital Corporation will act as the Plan Broker for the Premium Distribution(TM) component of the Plan.
Eligible unitholders who wish to participate in the Plan must provide enrolment instructions to the broker, investment dealer, financial institution or other nominee through which they hold their units, and should consult such nominee as to the deadline for doing so. Enrolment instructions will be collected and aggregated within the brokerage system and ultimately communicated to Computershare Trust Company of Canada, as Plan Agent. Eligible unitholders wishing to participate in the Plan for the October cash distribution payable in November, 2009 must provide enrolment instructions sufficiently in advance of the October 30, 2009 record date for that distribution to allow the broker, investment dealer, financial institution or other nominee holding their units to meet the deadline by which it must communicate enrolment instructions on behalf of its clients, and in any event by such time as the broker, investment dealer, financial institution or other nominee may require.
A complete copy of the Plan and a related series of Questions and Answers are available on the Partnership's website at www.epcorpowerlp.ca under the heading "Investors - DRIP", or from the Plan Agent at www.computershare.com or by calling (780) 392-5305. Unitholders should carefully read the complete text of the Plan before making any decisions regarding their participation in the Plan.
The Partnership reserves the right to limit the amount of new equity available under the Plan on any particular distribution date. Accordingly, participation may be prorated in certain circumstances. In the event of proration, or if for any other reason a cash distribution cannot be reinvested under the Plan, in whole or in part, a participating unitholder will receive from the Partnership the regular cash distribution on any units enrolled in the Plan for which the distribution is payable but which cannot be reinvested under the Plan in accordance with the unitholder's election. Participation in the Premium Distribution(TM) component of the Plan will initially be limited to 20% of the monthly distribution and the Partnership reserves the right to change or re-evaluate and change this limit from time-to-time.
No commissions, service charges or brokerage fees are payable in connection with the purchase of units from the Partnership under either component of the Plan. Unitholders should, however, consult the broker, investment dealer, financial institution or other nominee through which their units are held to confirm whether the nominee charges any fees to enrol in the Plan on their behalf.
Participation in the Plan does not relieve unitholders of any liability for taxes that may be payable in respect of distributions that are reinvested in new units or the 2% premium on cash distributions received under the Plan. Unitholders should consult their tax advisors concerning the tax implications of their participation in the Plan having regard to their particular circumstances.
The change in the distribution frequency and the introduction of the Plan were approved on behalf of the Partnership by the board of directors of EPCOR Power Services Ltd., the general partner of the Partnership (the "General Partner"), and amendments to the limited partnership agreement governing the Partnership will be made by the General Partner to give effect to change to monthly distributions.
Certain information in this press release is forward-looking and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Partnership's actual results and experience to be materially different than the anticipated results.
In particular, forward-looking information and statements include: (i) the Partnership's expectations regarding annual distributions, and (ii) the Partnership's long-term payout ratio target of approximately 75% of cash provided by operating activities less maintenance capital. These statements are based on certain assumptions and analyses made by the Partnership in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include: (i) the Partnership's operations, financial position and available credit facilities, (ii) the Partnership's assessment of commodity, currency and power markets, (iii) the markets and regulatory environment in which the Partnership's facilities operate, (iv) the state of capital markets, (v) management's analysis of applicable tax legislation, (vi) the assumption that the currently applicable and proposed tax laws and emissions regulations will not change and will be implemented, (vii) the assumption that counterparties to fuel supply and power purchase agreements will continue to perform their obligations under the agreements, (viii) that current third party expectations regarding throughput on the TransCanada Canadian Mainline will continue, (xi) the level of plant availability and dispatch, * the performance of contractors and suppliers, (xi) the renewal or replacement of power purchase agreements ("PPAs") and terms of PPAs, (xii) the ability of the Partnership to successfully integrate and realize the benefits of its acquisitions, (xiii) the ability of the Partnership to implement its strategic initiatives and whether such initiatives will yield the expected benefits, (xiv) expected water flows, and (xv) the ability of the Partnership to adequately source alternative sources of supply of wood waste.
Whether actual results, performance or achievements will conform to the Partnership's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Partnership's expectations. Such risks and uncertainties include, but are not limited to risks relating to (i) the operation of the Partnership's facilities, (ii) plant availability and performance, (iii) the availability and price of energy commodities including natural gas and wood waste, (iv) the performance of counterparties in meeting their obligations under PPAs, (v) competitive factors in the power industry, (vi) economic conditions, including in the markets served by the Partnership's facilities, (vii) ongoing compliance by the Partnership with its current debt covenants, (viii) developments within the North American capital markets, (ix) the availability and cost of permanent long term financing in respect of acquisitions and investments, * unanticipated maintenance and other expenditures, (xi) the Partnership's ability to successfully realize the benefits of acquisitions and investments, (xii) changes in regulatory and government decisions including changes to emission regulations, (xiii) waste heat availability and water flows, (xiv) changes in existing and proposed tax and other legislation in Canada and the US and including changes in the US tax treaty, (xv) the tax attributes of and implications of any acquisitions, (xvi) the availability and cost of equipment, (xvii) changing demand for natural gas in northern Ontario and areas further to the east and levels of natural gas supply in western Canada available for shipping on the TransCanada Canadian Mainline, and (xviii) the ability of the Partnership to adequately source alternative sources of supply of wood waste.
Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Except as required by law, the Partnership disclaims any intention and assumes no obligation to update any forward-looking statement.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The limited partnership units of the Partnership 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 or to any U.S. person absent registration or an applicable exemption from the registration requirements of such laws.
TM denotes trademark of Canaccord Capital Corporation
SOURCE EPCOR POWER L.P.
For further information: For further information: on the Partnership visit www.epcorpowerlp.ca or contact: Media Inquiries: Mike Long, (780) 392-5207; Unitholder & Analyst Inquiries: Randy Mah, (780) 392-5305, Toll Free (866) 896-4636