MONTRÉAL, Nov. 23, 2020
/PRNewswire/ - Boralex Inc. (TSX: BLX) ("Boralex" or the
"Corporation") is pleased to announce that Boralex US Solar CIA
LLC, a wholly owned subsidiary of the Corporation, has entered into
binding agreements with Centaurus Renewable Energy LLC ("CRE") and
certain other investors to acquire their controlling interests in
seven solar plants, located in the United
States, for a purchase price of $CA283 million (US$216.5 million). CRE and other investors
will retain certain non-controlling interests in the assets
resulting in total net installed capacity to Boralex of 118
MWac.
The operating solar plants totaling 209 MWac of gross installed
capacity, located in the City of Five
Points, the City of Huron,
Kettleman City, the City of Lancaster and the City of Newman, California; Chambers County, Alabama; and Indianapolis, Indiana, were commissioned
between 2014 and 2017. The assets benefit from long-term Power
Purchase Agreements ("PPAs") with the Regents of the University of California, Alabama Power Company,
PG&E, Southern California Edison, City of Palo Alto, and Indianapolis Power
& Light, expiring between 2029 and 2046 with a remaining
weighted average of more than 21.5 years on the PPAs.
Closing of the transaction is currently anticipated to occur on
or before December 31, 2020, subject
to the satisfaction of usual closing conditions, including receipt
of FERC approval for the Lafayette
and Five Points assets. The PPA of
the Lafayette asset contains a
right of first refusal in favor of Alabama Power, pursuant to which
the CRE interest in Lafayette can
be acquired by Alabama Power within sixty days of being notified of
a third-party binding offer by matching the proposed purchase
price. Boralex does not know whether Alabama Power intends to
exercise such right or not. The acquisition of the interest in this
specific asset is therefore subject to the waiver or expiry of this
right.
"The acquisition of Centaurus' interest in seven solar plants
will mark Boralex's entry into the California, Alabama, and Indiana markets. The acquisition of interests
in these high-quality assets secured by long term contracts is
perfectly aligned with the growth and diversification orientations
of our 2023 strategic plan. We are extremely pleased with the
stable stream of cash flow and strong growth potential this
transaction is bringing to Boralex. This transaction will be
accretive to discretionary cash flow (AFFO) per share in the
first year and will be a springboard to further development in
these new regional energy markets for Boralex, especially
California" said Patrick Lemaire, President and Chief Executive
Officer of Boralex.
Highlights1
- Acquisition price: CA$283M (US$216.5M)
- Debt financing covering about 75% of the acquisition price to
be put in place
- Adds 118 MWac net power to Boralex's installed capacity
- Long term contracts with a remaining weighted average duration
of more than 21.5 years
- Expected combined EBITDA (US GAAP) contribution: around CA$20M
(US$15M)
- Accretive to discretionary cash flow (AFFO) per share in the
first year with expected AFFO of about CA$4M (US$3M) or $0.03 per
share, a 3 % increase over the consolidated amount generated by
Boralex in 2019
"We are excited to announce these agreements to acquire
interests in this portfolio of solar plants, which offers a good
seasonal complement to our wind and hydro assets as well as
predictable cash flows. Upon closing, Boralex will become the
new managing member of the sites and, over time, we will implement
various strategies expected to increase the results for Boralex "
added Patrick Decostre, Vice President and Chief Operating Officer
of the corporation.
Expected Synergies
- Assets optimization through improved operating and maintenance
work
- Accretive retrofits and repowering potential given high PPA
prices, PPA flexibility and long remaining PPA terms
- Springboard to our participation in the growth of these new
regional energy markets, with a focus on California where Boralex sees additional
potential development which could be done, among others, with the
resources to be deployed for the assets to be acquired
- Potential addition of storage in California
- Operational experience improving the competitiveness of
greenfield development
Description of the Assets
The assets are comprised of
the following:
- Lafayette solar plant
(79 MWac) ("Lafayette") is located in Chambers County, AL and the sponsor equity is
currently owned by CRE (59%) affiliates of Global Atlantic
Financial Group (40%) and a minor investor (1%). Lafayette was commissioned in December 2017 and has a PPA in place with Alabama
Power Company, expiring in December
2045, and has third-party tax equity;
- Five Points solar plant
(60 MWac) ("Five Points") is located in Five Points, CA and the sponsor equity is
currently owned by CRE (50%) and affiliates of Global Atlantic
Financial Group (50%). Five Points
was commissioned in October 2016 and
has a PPA in place with the Regents of University of California, expiring in October 2041, and has third-party tax equity;
- Kettleman solar plant (20 MWac) ("Kettleman") is located
in Kettleman City, CA and is
currently owned by CRE (50%) and affiliates of Global Atlantic
Financial Group (50%). Kettleman was commissioned in August 2015 and has a PPA in place with the
City of Palo Alto, expiring in
August 2040, and no longer has any
third-party tax equity;
- Frontier solar plant (20 MWac) ("Frontier") is located
in Newman, CA and the sponsor
equity is currently owned by CRE (50%) and affiliates of Global
Atlantic Financial Group (50%). Frontier was commissioned in
July 2016 and has a PPA in place with
the City of Palo Alto, expiring in
July 2046 and has third-party tax
equity;
- Westlands solar plant (18 MWac) ("Westland") is located
in Huron, CA and is currently
owned by CRE (65.5%) and affiliates of Global Atlantic Financial
Group (32.5%) and a minority investor (2%). Boralex will acquire
50% of the Total Class B interests leaving CRE with 15.5%. Westland
was commissioned in January 2014 and
has a PPA in place with PG&E, expiring in February 2034, and does not have any third-party
tax equity;
- Lancaster solar plant
(3 MWac) ("Lancaster") is located in Lancaster, CA and is currently owned by CRE
(100%). Lancaster was commissioned
in December 2014 and has two PPAs in
place with Southern California Edison, expiring in December 2034 and does not have any third-party
tax equity; and
- IMS solar plant (9 MWac) ("IMS") is located in
Indianapolis, IN and is currently
owned by CRE (100%). IMS was commissioned in July 2014 and has a PPA in place with
Indianapolis Power & Light, expiring in July 2029, and no longer has any third-party tax
equity.
__________________________
1 Assuming LaFayette ROFR is not exercised
About Boralex
Boralex develops, builds and operates
renewable energy power facilities in Canada, France, the United
Kingdom and the United
States. A leader in the Canadian market and France's largest independent producer of
onshore wind power, the Corporation is recognized for its solid
experience in optimizing its asset base in four power generation
types — wind, hydroelectric, thermal and solar. Boralex ensures
sustainable growth by leveraging the expertise and diversification
developed over 30 years. Boralex's shares are listed on the Toronto
Stock Exchange under the ticker symbol "BLX".
More information is available at www.boralex.com or
www.sedar.com. Follow us on Facebook, LinkedIn and
Twitter.
Caution Regarding Forward-Looking Statements
Some of
the statements contained in this press release, including those
regarding the transaction with CRE, the benefits from the
transaction and the acquired interests, the accretion to
discretionary cash flows, the expected EBITDA contribution from the
interests acquired, the expected synergies from the
transaction, the expected expiry dates of the PPAs, the
satisfaction of the closing conditions to the transaction, the
receipt of regulatory approvals, the targeted debt to equity
contributions, the completion of financing and the anticipated date
of closing of the transaction are forward-looking statements based
on current expectations, within the meaning of securities
legislation.
The forward-looking statements are based on material
assumptions, including the following: assumptions about the
performance the Corporation will obtain from the interests to be
acquired, based on management's estimates and expectations with
respect to factors related to production and other factors;
assumptions made about EBITDA margins; assumptions made about the
situation in the sector and the economic situation in general,
competition and the availability of financing.
Although Boralex believes that the expectations reflected by the
forward-looking statements presented in this news release are
reasonable, Boralex would like to point out that, by their very
nature, forward-looking statements involve risks and uncertainties
such that its results or the measure it adopts could differ
materially from those indicated by or underlying these statements,
or could have an impact on the degree of realization of a
particular forward looking statement.
Unless otherwise specified by the Corporation, the
forward-looking statements do not take into account the possible
impact on its activities, transactions, non-recurring items or
other exceptional items announced or occurring after the statements
are made. There can be no assurance as to the materialization of
the results, performance or achievements as expressed or implied by
forward-looking statements. The reader is cautioned not to place
undue reliance on such forward-looking statements.
Unless required to do so under applicable securities
legislation, Boralex management does not assume any obligation to
update or revise forward-looking statements to reflect new
information, future events or other changes.
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SOURCE Boralex Inc.