“The Mountain Air Acquisition is expected to be immediately accretive to Free Cash Flow per share. We are pleased to further expand our portfolio in the United States with fully contracted wind farms,” said Michel Letellier, president and CEO of Innergex. “Despite the current crisis, Innergex remains in an excellent position to pursue its growth, and we remain committed to identifying strategic acquisition opportunities on our own as well as through our Strategic Alliance with Hydro-Québec.”
The wind farms were fully commissioned in December 2012. The Mountain Air Acquisition is expected to produce a gross estimated long-term average of 331 GWh per year and a $21.1 million projected adjusted EBITDA for 2021. The Class B shares should provide Innergex with additional cash immediately available for distribution representing 62.25% of the project free cash flow. Following cash distributions to the tax equity partner, the distributions receivable by Innergex would be approximately $6.1 million.
Commenting on the agreement reached, the chairman of Terna Energy Group, George Peristeris, stated, “About a decade ago we made the strategic decision to expand our investment program in the US market. This decision proves to be extremely beneficial for the group and its shareholders, as in addition to the significant increase in the group’s size and profitability, it also offers significant capital gains as well as funds to finance our new investment program. The company is systematically monitoring new opportunities, optimizing the allocation of funds and the return on its capital.”
The Class A shares will remain the property of the tax equity partner. The existing $111.1 million long-term non-recourse project-level financing amortized over the next 12 years remains in place.
The Mountain Air wind farms are equipped with a total of 60 Siemens Gamesa 2.3 - 101 model wind turbines that are all connected to a common substation. The wind turbines are currently under a full scope Service Maintenance Agreement, and all wind farms have power purchase agreements with Idaho Power Company, a power utility rated BBB by Standard & Poor’s, for 100% of their capacity over a remaining period of approximately 12 years.
The Mountain Air Acquisition is the second of the two potential acquisitions announced on February 6, 2020, completed using the proceeds of Hydro-Québec's private placement. The use of the proceeds for both acquisitions is less than anticipated last February, mainly because the Corporation decided to adopt a different structure with the Mountain Air Acquisition, acquiring only one class of the total shares of the project while maintaining the same free cash flow accretion profile. The remaining proceeds from Hydro-Québec's private placement could therefore be applied to other opportunities.
