Northland Power Inc.

Northland Power Inc.

January 17, 2012 19:00 ET

Northland Power Announces the Conversion of Certain Securities Resulting from Recently Completed Projects

TORONTO, ONTARIO--(Marketwire - Jan. 17, 2012) - Northland Power Inc. ("Northland") (TSX:NPI)(TSX:NPI.PR.A)(TSX:NPI.DB.A) announced today that certain of its Class C Convertible Shares have converted to Class A Shares and certain Replacement Rights are now convertible to Common Shares pursuant to the terms of these securities.

A process for determining the convertibility of these securities (the "Determination Process") was established as part of the terms of the 2009 merger between Northland Power Inc. and Northland Power Income Fund and is incorporated in Northland's corporate Articles of Arrangement. Pursuant to the Determination Process, a special committee of the independent directors of Northland (the "Special Committee") retained BMO Nesbitt Burns Inc. as an independent financial advisor (the "Financial Advisor") to determine the Fair Market Value and the Development Profits (as defined in the 2009 merger documents and corporate articles) of certain recently completed Northland projects.

The terms of Northland's Class B Convertible Shares and Class C Convertible Shares provide that these shares may be converted into Class A Shares based on the Development Profits attributable to certain of Northland's electricity generation projects as they are completed. Development Profits are determined by the Determination Process and are calculated as the mid-point of a fair market value range of the projects at completion as determined by the Financial Advisor, less the actual project costs and other adjusting items. The Special Committee provided direction and oversight to the Financial Advisor. The report prepared by the Financial Advisor is not a "formal valuation" for purposes of Multilateral Instrument 61-101.

As previously announced, Northland's 100 megawatt (MW) Mont Louis wind farm and 86 MW Spy Hill gas-fired peaker project achieved commercial operations on September 17, 2011 and October 19, 2011 respectively. Four solar rooftop projects developed in partnership with Loblaw Supermarkets reached substantial completion at various points during 2011. Additionally, Northland sold its South Kent development project in the first quarter of 2011. These projects were determined to be all of the qualifying projects to be included in the current Determination Process.

The Financial Advisor determined that the total Development Profits for these qualifying projects, after the required adjustments, was $49.5 million. As a result of the prescribed calculations, 4,206,270 Class C Convertible Shares have been converted into Class A Shares on a one-for-one basis. No Class B Convertible Shares are eligible for conversion at this time based on the results of the current Determination Process.

All of the Class B Convertible Shares and Class C Convertible Shares are held by Northland Power Holdings Inc., a corporation indirectly owned by James C. Temerty, the Chair of the Corporation. Following the conversion, Northland Power Holdings Inc. owns 29,851,868 Class A Shares, 8,067,723 Class B Convertible Shares and 4,289,808 Class C Convertible Shares.

Northland also announced that 744,567 contingent Replacement Rights securities held by senior management of Northland are now convertible into Common Shares pursuant to the terms of those securities and proportionate to the conversion of the Class C Convertible Shares.

To the extent subsequent qualifying projects are completed, up to 4,289,808 additional Class C Convertible Shares and 8,067,723 Class B Convertible Shares may be converted into Class A Shares based on the Development Profits of those projects as determined in a subsequent determination process. In addition, up to an additional 759,355 contingent Replacement Rights may be convertible into Common Shares in proportion to the remaining Class C Convertible Shares that become eligible for conversion into Class A Shares.


Northland Power Inc. (TSX:NPI) owns or has a net economic interest in 1,004 MW of operating generating capacity, and 260 MW of generating capacity in advanced construction. Northland is also actively developing 340 MW of wind, solar and run-of-river hydro projects already awarded PPAs and approximately 2,200 MW of additional power generation opportunities. Northland's assets comprise facilities that produce electricity from "clean" natural gas and "green" renewable sources such as wind, solar and biomass. Electricity generation and capacity is primarily sold under long-term contracts with creditworthy customers. Northland's operating thermal power assets are located in the provinces of Ontario and Saskatchewan, Canada, and include the 120 MW Iroquois Falls cogeneration facility, the 110 MW Kingston combined-cycle power facility, the 265 MW Thorold cogeneration facility, the 86 MW Spy Hill peaking facility and an economic interest in two natural-gas- and biomass-fired generation facilities as well as a 19% equity interest in the 230 MW Panda-Brandywine combined-cycle power facility located outside Washington, D.C. Northland's operating renewable power facilities include the 128 MW Jardin d'Éole wind farm and the 100 MW Mont Louis wind farm both located in Quebec, two wind farms totalling 22 MW of installed capacity located in Germany and several rooftop solar power facilities in Ontario. Northland owns the 260 MW North Battleford project, which is currently under construction in Saskatchewan, Canada. Northland's cash flows are diversified over five geographically separate regions and regulatory jurisdictions.

Northland's common shares, preferred shares and convertible debentures trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A and NPI.DB.A, respectively.

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