Algonquin Power & Utilities Corp.

November 10, 2009 16:38 ET

Algonquin Power & Utilities Corp. Announces $75 Million Offering of Common Shares and Convertible Debentures

OAKVILLE, ONTARIO--(Marketwire - Nov. 10, 2009) -


Algonquin Power & Utilities Corp. ("Algonquin") (TSX:AQN) today announced that it has entered into an agreement to sell to a syndicate of underwriters led by CIBC World Markets Inc. and BMO Capital Markets, on a bought deal basis, 5,980,000 common shares (the "Common Shares") at $3.35 per common share for gross proceeds of $20 million and $55 million principal amount of 7% convertible unsecured subordinated debentures due June 30, 2017 (the "Debentures"). Algonquin has granted the Underwriters an option, exercisable in whole or in part at any time up until 30 days after the Closing Date, to purchase an additional 897,000 common shares and $8.25 million principal amount of Debentures, on the same terms. If such option is exercised in full, the total gross proceeds of the financing will be approximately $86 million.

Proceeds of approximately $35 million from the Debenture offering will be used to reduce existing senior short term bank credit facilities. The proceeds of the Common Share offering and the balance of the Debenture offering will be used to finance the recently announced hydroelectric generating facility acquisition and for other general corporate purposes.

"The assets being acquired are long lived, utility grade hydroelectric generating facilities which support Algonquin's commitment to providing total shareholder return through a combination of predictable and growing earnings and dividends together with capital appreciation and are expected to be accretive to both earnings and cash flow per share" commented Ian Robertson, a senior officer with Algonquin. "The addition of these assets is expected to deliver growth of more than 10% in our renewable energy business, reinforcing Algonquin's strategic focus on the renewable energy sector", he continued.

The Debentures will bear interest at a rate of 7% per annum payable semi-annually in arrears on the last day of June and December in each year commencing on June 30, 2010, and will mature on June 30, 2017. The Debentures will be convertible at the holder's option into common shares of Algonquin at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $4.20 per common shares (the "Conversion Price"). The Debentures will not be redeemable on or before December 31, 2012. After December 31, 2012 and on or before December 31, 2014, the Debentures may be redeemed in whole or in part from time to time at Algonquin's option provided that the volume weighted average trading price for the common shares is not less than 125% of the Conversion Price. On and after December 31, 2014 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at Algonquin's option at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, Algonquin may elect to satisfy its obligations to repay the principal amount and accrued interest of the Debentures which are to be redeemed or which have matured by issuing Common Shares to the holders. The offering will be made in all provinces of Canada and is expected to close on or about December 2, 2009, subject to regulatory approval. The Common Shares and Debentures have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States.

About Algonquin Power & Utilities Corp.

Through its distinct operating subsidiaries, Algonquin owns and operates a diversified approximately $1 billion North American portfolio of clean renewable electric generation and sustainable utility distribution businesses. Algonquin's electric generation subsidiary includes 42 renewable energy facilities and 11 high efficiency thermal energy facilities representing more than 400 MW of installed capacity. Through its wholly owned subsidiary, Liberty Water Co., Algonquin provides regulated utility services to more than 70,000 customers with a portfolio of 18 water distribution and wastewater treatment utility systems. Pursuant to a previously announced agreement, Algonquin is committed to acquiring the California based regulated utility electric distribution and generation assets of NV Energy which serve approximately 47,000 retail electricity distribution customers. Algonquin and its operating subsidiaries deliver continuing growth through an expanding pipeline of greenfield and expansion renewable power and clean energy projects, organic growth within its regulated utilities and the aggressive pursuit of accretive acquisition opportunities. Algonquin's common shares and convertible debentures are traded on the Toronto Stock Exchange under the symbols AQN, AQN.DB and AQN.DB.A. Visit Algonquin Power & Utilities Corp. on the web at

Forward Looking Information

Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect Algonquin's and its subsidiaries' current expectations. 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. These statements may include, without limitation, statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of Algonquin and its subsidiaries' for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "will" and "may". This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management's current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties, including those set out in the management's discussion and analysis section of Algonquin's 2008 annual report, Algonquin's Annual Information Form dated March 31, 2009, Algonquin's Management Information Circular dated March 20, 2009. Algonquin's actual results could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or what benefits, including the amount of dividends, Algonquin and shareholders will derive therefrom.

The forward-looking statements contained in this news release are made as of the date hereof for the purpose of providing readers with Algonquin's expectations for the coming year. The forward-looking statements may not be appropriate for other purposes. Other than as specifically required by law, Algonquin undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

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