Fort Chicago announces take-over offer for Countryside Power Income Fund


    Trading Symbol: FCE.UN
    Exchange: TSX

    CALGARY, June 20 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort
Chicago" or the "Partnership") (TSX: FCE.UN) announced today that it has
entered into a definitive support agreement ("Support Agreement") pursuant to
which the Partnership will offer to acquire (the "Offer") all of the
outstanding units ("Units") of Countryside Power Income Fund ("Countryside")
(TSX: COU.UN) for cash consideration of $9.60 per Unit.
    The consideration under the Offer represents a 10.9% premium over the
price of the Units as of February 8, 2007, the day prior to the announcement
of the strategic review process, and a 6.1% premium over the price of the
Units as of the close on June 19, 2007, and represents an equity value of
approximately $199.8 million, based on 20,813,537 fully-diluted Units
    The cash consideration under the Offer will be financed with cash
balances on hand at the time of closing and Fort Chicago's existing credit
facility. Fort Chicago intends on refinancing the acquisition in a manner
consistent with its current capital structure.
    "This acquisition complements Fort Chicago's existing portfolio of energy
assets and represents an excellent opportunity to expand its power platform in
power constrained markets that offer potential future growth," indicated
Stephen White, President and Chief Executive Officer of Fort Chicago. "In
addition, the acquisition is expected to generate meaningful accretion to Fort
Chicago's distributable cash per unit."
    The acquisition will add four operational power facilities:

    a)  49 megawatt ("MW") gas-fired cogeneration facility in northern
        California which sells its electrical output under a power purchase
        agreement ("PPA") until 2018 to Pacific Gas & Electric (BBB+/A3);

    b)  44 MW gas-fired cogeneration facility in southern California which
        sells its electrical output under a PPA until 2016 to Southern
        California Edison (BBB+/Baa1);

    c)  A district energy system located in Charlottetown, PEI that delivers
        steam and hot water to over 100 governmental, institutional and
        commercial customers; and

    d)  A district energy system located in London, Ontario that delivers
        steam and chilled water to over 60 governmental, institutional and
        commercial customers.

    In addition to its operational power projects, Countryside's portfolio
includes a number of near-term and medium-term growth opportunities including:

    a)  17 MW gas-fired cogeneration facility currently under construction in
        London with commercial start-up expected in mid-2008. The facility
        will sell its electrical output under a PPA with the Ontario Power
        Authority until 2028;

    b)  Repowering opportunities with LM6000 turbines at the California
        facilities which would be expected to deliver improved efficiency and
        higher output;

    c)  Potential 100 MW greenfield expansions at each of its California
        sites; and

    d)  Strong organic customer growth and other optionality at the District
        Energy facilities.

    The Board of Trustees of Countryside ("Board of Trustees"), based on the
recommendation of its special committee of independent trustees, has
unanimously resolved to recommend that holders of Units of Countryside accept
the Offer. The Officers and trustees of Countryside have agreed to tender any
Units they own or control to the Offer. Lehman Brothers is acting as financial
advisor to Countryside and RBC Capital Markets has provided the Board of
Trustees with a fairness opinion that the consideration to be received by
Countryside Unitholders pursuant to the Offer is fair from a financial point
of view.
    The Support Agreement provides for the payment by Countryside of a break
fee equal to $5.5 million, and a non-completion fee in the amount of
$2 million payable by Countryside under certain circumstances. The Support
Agreement also includes a non-solicitation covenant on the part of Countryside
and a right in favour of Fort Chicago to match any competing offers.
    The Offer will be conditional upon acceptance by holders of not less than
66 2/3% of Countryside's Units as well as receipt of all necessary regulatory
approvals and other customary conditions. A take-over-bid circular containing
the terms of the Offer will be mailed to Unitholders, together with a Board of
Trustees' circular and other related documents, on or before July 5, 2007. The
Offer, unless extended, will expire 35 days from its commencement, subject to
receipt of any required regulatory approvals. Fort Chicago will also make an
offer to purchase Countryside Canada Power Inc.'s 6.25% exchangeable
debentures at a price equal to 101% of the face value thereof.
    CIBC World Markets Inc. is acting as the exclusive financial advisor and
Torys LLP and Bennett Jones LLP are the legal advisors to Fort Chicago in
connection with the Offer.

    Conference Call and Webcast

    Fort Chicago will host a live conference call and webcast at 11:00 a.m.
Mountain time (1:00 p.m. Eastern time) on Wednesday, June 20, 2007. The call
can be accessed at 1-800-733-7571 and will be broadcast live on the Internet.
This can be accessed either through a link contained in the "Event" section
located on the home page of Fort Chicago's website or through the following

    A replay will be available shortly thereafter at 1-877-289-8525 or
1-416-640-1917. The access code in each case is 21237473 (followed by the
number sign).

    About Fort Chicago

    Fort Chicago is a publicly traded limited partnership. Its Class A Units
are listed on the TSX under the symbol FCE.UN and have been assigned a
stability rating by Dominion Bond Rating Service and Standard & Poor's of
STA-2 (low) and SR-2, respectively. Together with its affiliates, Fort Chicago
presently owns a 50.0% interest in the Alliance Pipeline, an approximate 42.7%
interest in Aux Sable and Alliance Canada Marketing and a 100% interest in the
Alberta Ethane Gathering System ("AEGS"). The Alliance Pipeline is a
3,000 kilometre mainline natural gas pipeline, which extends from northeastern
British Columbia to delivery points near Chicago, Illinois. Aux Sable operates
natural gas liquids extraction, fractionation and delivery facilities near
Chicago. AEGS is a 1,324 kilometre ethane pipeline system, which delivers
ethane feedstock to Alberta's petro-chemical industry.
    Fort Chicago and its businesses are also actively developing a number of
greenfield investment opportunities that will be a key source of future
growth, including LNG and pipeline facilities on the U.S. west coast,
Alberta-based ethane and NGL extraction facilities capable of processing
off-gas produced by Alberta's oil sands upgraders, a co-generation power
facility situated in Ontario and a Nova Scotia-based underground natural gas
storage facility.

                     Class A Unit Ownership Restrictions

    Fort Chicago is organized in accordance with the terms and conditions of
a limited partnership agreement which provides that no Class A Units may be
transferred to, among other things, a person who is a "non-resident" of
Canada, a person in which an interest would be a "tax shelter investment" or a
partnership which is not a "Canadian partnership" for purposes of the Income
Tax Act (Canada).

    Certain information contained herein relating to Fort Chicago and its
businesses constitutes forward-looking information under applicable securities
laws. All statements, other than statements of historical fact, which address
activities, events or developments that we expect or anticipate may or will
occur in the future, are forward-looking information. Forward-looking
information typically contains statements with words such as "may",
"estimate", "anticipate", "believe", "expect", "plan", "intend", "target",
"project", "forecast" or similar words suggesting future outcomes or outlook.
The following discussion is intended to identify certain factors, although not
necessarily all factors, which could cause future outcomes to differ
materially from those set forth in the forward-looking information. The risks
and uncertainties that may affect the operations, performance, development and
results of our businesses include, but are not limited to, the following
factors: the ability of Fort Chicago to successfully implement its strategic
initiatives and achieve expected benefits; the status, credit risk and
continued existence of contracted customers; the availability and price of
energy commodities; fluctuations in foreign exchange and interest rates; the
regulatory environment; competitive factors in the pipeline, NGL and power
industries; and the prevailing economic conditions in North America. The
reader is cautioned that these factors and risks are difficult to predict and
that the assumptions used in the preparation of such information, although
considered reasonably accurate by Fort Chicago at the time of preparation, may
prove to be incorrect or may not occur. Accordingly, readers are cautioned
that the actual results achieved will vary from the information provided
herein and the variations may be material. Readers are also cautioned that the
foregoing list of factors and risks is not exhaustive. Additional information
on these and other risks, uncertainties and factors that could affect Fort
Chicago's operations or financial results are included in our filings with the
securities commissions or similar authorities in each of the provinces of
Canada, as may be updated from time to time. There is no representation by
Fort Chicago that actual results achieved will be the same in whole or in part
as those set out in the forward-looking information. Furthermore, the
forward-looking statements contained herein are made as of the date hereof,
and Fort Chicago does not undertake any obligation to update publicly or to
revise any forward-looking information, whether as a result of new
information, future events or otherwise. Any forward-looking information
contained herein is expressly qualified by this cautionary statement.
    Certain financial information contained in this news release may not be
standard measures under Generally Accepted Accounting Principles ("GAAP") in
Canada and may not be comparable to similar measures presented by other
entities. These measures are considered to be important measures used by the
investment community and should be used to supplement other performance
measures prepared in accordance with GAAP in Canada. For further information
on non-GAAP financial measures used by Fort Chicago see Management's
Discussion and Analysis, in particular, the section entitled "Non-GAAP
Financial Measures" contained in the annual Management Discussion and
Analysis, filed by Fort Chicago with Canadian securities regulators.

For further information:

For further information: Stephen H. White, President and C.E.O., Hume D.
Kyle, Vice President, Finance and C.F.O., Fort Chicago Energy Partners L.P.,
Stock Exchange Tower, 2150, 300 Fifth Avenue S.W., Calgary, AB, T2P 3C4,
Phone: (403) 296-0140, Fax: (403) 213-3648,

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