Business
Capital Power to acquire Vancouver Island power plant 275 MW facility accretive to Company's earnings
Capital Power to acquire Vancouver Island power plant 275 MW facility accretive to Company's earn...
About this update from Capital Power Corporation
[{"type":"text","content":"\n\n\n\n Aug. 3, 2010 (Canada NewsWire Group) -- \n\n \n \n \nTR.cnwUnderlinedCell TD {\n BORDER-BOTTOM: #000000 1px solid\n}\nTR.cnwDoubleUnderlinedCell TD {\n BORDER-BOTTOM: #000000 3px double\n}\nTR.cnwBoldUnderlinedCell TD {\n BORDER-BOTTOM: #000000 3px solid\n}\nTD.cnwUnderlinedCell {\n BORDER-BOTTOM: #000000 1px solid\n}\nTD.cnwDoubleUnderlinedCell {\n BORDER-BOTTOM: #000000 3px double\n}\nTD.cnwBoldUnderlinedCell {\n BORDER-BOTTOM: #000000 3px solid\n}\n\nEDMONTON, Aug. 3 /CNW/ - Capital Power Corporation (TSX: CPX) (Capital Power) today announced that it has entered into an agreement to acquire the Island Generation Facility (Island Generation), a 275 megawatt (MW), gas-fired combined cycle power plant at Campbell River, British Columbia. The transaction is expected to close in the fourth quarter of 2010, subject to regulatory and other approvals.\nThe Purchase and Sale Agreement (PSA) for the transaction is between Capital Power LP, the legal entity that directly and indirectly holds Capital Power's assets, and Kelson Canada Inc. Subject to market conditions, Capital Power expects to permanently finance the purchase price of approximately $207 million, plus closing costs and normal working capital adjustments, with a combination of debt and equity.\nThe acquisition meets the minimum nine per cent hurdle rate (unlevered, after-tax) for Capital Power's contracted assets. The acquisition is expected to be modestly and immediately accretive to earnings, and more significantly accretive to cash flow, based on Electricity Purchase Arrangement (EPA) terms and our expectations on accounting treatment.\n"Since Capital Power's launch in July 2009, approximately 700 MW of new capacity has been added or placed into development, including 247 MW in new wind power projects," said Capital Power's President and CEO, Brian Vaasjo. "The Island Generation facility will be the first addition to our fleet made via acquisition, and it demonstrates our commitment to significant growth under strategies encompassing both diversity of fuel types and conservative financial structure."\nIsland Generation is fully-contracted from April 1, 2010 to April 2022 under a tolling arrangement with BC Hydro, a AAA-rated counterparty by Standard and Poors. BC Hydro is responsible for the fuel supply to the facility. Commissioned in 2002, ...