Innergex Power Income Fund
TSX : IEF.UN

Innergex Power Income Fund

September 16, 2005 07:49 ET

Innergex Power Income Fund Announces The Acquisition Of Rutherford Creek Power Station

LONGUEUIL, QUEBEC--(CCNMatthews - Sept. 16, 2005) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Innergex Power Income Fund (TSX:IEF.UN)(the "Fund") announced today that it has reached an agreement with Innergex II Income Fund ("Innergex II") to acquire the Rutherford Creek hydroelectric power station located in British Columbia for a total consideration of $100.4 million from Innergex II and the other owners of the facility. This acquisition is subject to usual closing conditions for transactions of this nature, including regulatory and third parties approvals. Upon closing of the acquisition, the Fund expects that the acquisition will be immediately accretive to the distributable cash per unit. The Fund has authorized an increase in monthly cash distribution per Trust Unit equivalent to $0.02 per annum effective as of the first day of the month following the closing of the Rutherford Creek acquisition.

The Rutherford Creek power station is a 49.9-megawatts (MW) run-of-the-river hydroelectric power facility located near Pemberton in British Columbia. The project benefits from a long-term Power Purchase Agreement ("PPA") with an original term of 20 years with British Columbia Hydro and Power Authority which expires in 2024. The Fund has committed to collaborate with the vendors to maintain commitments towards local communities, including the Whitewater Kayaking Association of British Columbia. The acquisition of this facility, commissioned in 2004, will increase the installed capacity of the Fund to 129.9 MW.

Of the acquisition cost of $100.4 million, $50.4 million will be paid in cash and $50 million relates to the assumption of indebtedness incurred during project development. The Fund intends to finance the cash portion of this acquisition, an increase in the Fund's hydrology reserve and to pay related expenses to the acquisition with the net proceeds from the issuance of subscription receipts. To that end, the Fund announces that it has entered into an agreement to sell to a syndicate of underwriters led by BMO Nesbitt Burns Inc. and TD Securities Inc. and including CIBC World Markets Inc. and RBC Capital Markets, 4,033,000 subscription receipts at $13.85 per receipt, representing gross proceeds of approximately $55.9 million. The subscription receipts will be issued by way of short form prospectus to be filed with securities regulatory authorities across Canada. The subscription receipts have not been and will not be registered under the United States Securities Act of 1933, in its modified version, and except pursuant to an exemption from registration, may not be offered or sold in the United States. Closing of this subscription receipt offering is expected to occur on October 5, 2005.

"The acquisition of the Rutherford Creek power station is in keeping with the Fund's strategy to maintain and increase its distributable cash per unit. The qualities of the facility and of its long-term PPA with British Columbia Hydro and Power Authority, as well as the addition of an eighth watershed are expected to reinforce the Fund's long-term stability. In addition, this acquisition shows the successful business relationship between Innergex Power Income Fund and Innergex II", remarked Gilles Lefrancois, President and Chief Executive Officer of Innergex Management Inc., the Manager of the Fund.

PROFILE

Innergex Power Income Fund is an open-ended income trust that currently owns nine hydroelectric power generating facilities with a total installed capacity of 80 MW. The facilities are operated and managed by Innergex Management Inc. under long-term agreements with the Fund.

FORWARD-LOOKING STATEMENTS

Investors should take note that certain statements in this press release are forward-looking and may not give full weight to all of the potential risks and uncertainties. Forward-looking statements are subject by their nature to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the forward-looking statements. Any forward-looking statements speak only as of the date made. The Fund is not undertaking to update any forward-looking statements.

Further information can be found in the disclosure documents filed by Innergex Power Income Fund with the securities regulatory authorities, available at Sedar's website at www.sedar.com or Innergex Power Income Fund website at www.innergex.com.

Contact Information

  • Innergex Management Inc.
    Mr. Michel Letellier
    Executive Vice President and CFO
    (450) 928-2550, ext. 227
    or
    Innergex Management Inc.
    M. Jean Trudel
    Vice President - Finance and Investor Relations
    (450) 928-2550, ext. 252
    info@innergex.com
    www.innergex.com