Western Wind Increases Megawatts under Contract by 51% from 195MW
to 295MW and Responds to Brookfield's Latest Offer
TSX.V Symbol: "WND"
OTCQX Symbol: "WNDEF"
Issued and Outstanding: 70,462,806
VANCOUVER,
Feb. 4, 2013 /CNW/ - Western Wind
Energy Corp. - (the "Company" or "Western Wind") (TSX Venture
Exchange - "WND") (OTCQX - "WNDEF") provides an update and responds
to an amendment to the unsolicited offer (as amended, the "Offer")
by WWE Equity Holdings Inc, an indirect subsidiary of Brookfield
Renewable Energy Partners L.P. (together, "Brookfield") to acquire
all of the issued and outstanding common shares (the "Shares" or
the "Western Wind Shares") of Western Wind.
Option on New 100 MW Power Purchase
Agreement
Western Wind is pleased to announce that the
Company has entered into an option agreement (the "Option
Agreement") with PBJL Energy Corporation ("PBJL") for the sole and
exclusive right and option (the "Option") to purchase rights held
by PBJL under a Master Renewable Power Purchase and Operating
Agreement (the "Master PPA") between PBJL and Puerto Rico Electric Power Authority (the
"Power Authority"). Pursuant to the Master PPA, PBJL has the
right to sell power from one or more solar energy facilities with a
net aggregate capacity of up to 100MWs in various locations in
Puerto Rico (the "Project Rights")
and the Power Authority has agreed to purchase all electricity
produced from the locations in connection with the Project Rights.
The power purchase agreements entered into under the Master PPA
will have a tenure of 20 years and the projects must be online by
December 31, 2015.
Pursuant to the Option Agreement, the Company
has the exclusive right to acquire the Project Rights and all
rights currently held by PBJL under the Master PPA upon making a
payment of US$5,000,000. The
Option may be exercised either by acquiring the shares of PBJL or
the Project Rights including an assignment of the Master PPA. The
Option will terminate upon the earlier of (i) September 30, 2013, if the closing of the Option
has not occurred on or before that date; (ii) immediately at
the sole discretion of PBJL, upon a "change of control" (as defined
in the Option Agreement) of Western Wind which includes a
transaction which is not supported by the Board of Directors or a
material change in the composition of the Board of Directors of the
Company. Unless the Offer is supported by the Board of Directors,
the taking up of shares by Brookfield under the Offer will permit PBJL to
terminate the Option.
The Company was able to acquire the Option for
nominal consideration. PBJL is a private company principally owned
by independent businessmen who from time to time provide consulting
services to the Company. The US$5
Million payment will be paid by and at the sole discretion
of the Board approved purchaser of Western Wind.
The Company's ability to exercise the 100MW
option will be subject to the receipt of all required
approvals. The Master PPA can be used on sites acquired or
developed by third parties and, subject to meeting all stated
conditions, the Power Authority is obligated to purchase the energy
generated up to 100 MW. There is no obligation by PBJL to
produce or build any facility.
Response to Amended Offer
On January 28,
2013, Brookfield announced
that it had amended and supplemented the Offer in order to (a)
increase the price payable under the Offer to $2.60 in cash for each Western Wind Share and (b)
extend the expiry of the Offer from 5:00
p.m. (Toronto time) on
January 28, 2013 to 5:00 p.m. (Toronto time) on February 11, 2013 (a statutory holiday in
British Columbia), unless the
Offer is further extended or withdrawn (the "Amended Offer").
After careful consideration, including a
thorough review of the Amended Offer, as well as other factors, on
February 3, 2013, the Special
Committee and the Board of Directors both determined that they
recommend that shareholders REJECT the Amended Offer.
While the auction process remains open, no
binding offer has been made as of the date of this news release.
Brookfield acquired its interest
in the Company after the announcement of the sale process. The
Board of Directors is of the view that this was done to influence
the sale process. To date, the presence of the Offer in addition to
Brookfield's position as a
significant shareholder of the Company has had a chilling effect on
the sale process.
The Special Committee and the Board of Directors
continue to believe that the sale of the Company should proceed by
way of an auction process unencumbered by the Offer.
Management and the Board of Directors of the Company remain
committed to a sale of the Company and delivering the superior
value to its shareholders.
The Project Rights and the Master PPA may
represent an important asset of the Company and provide an
opportunity to increase value during the sales process. The
Offer, as it was made before the entering into of the Option
Agreement, does not ascribe any value to the Project Rights or the
Master PPA. The Board of Directors is of the view that the
acquisition of an option on the Project Rights and the Master PPA
is an example of current management's belief that it can deliver
greater value to shareholders than represented by the Offer, and
that a Board supported purchaser will have a substantial
opportunity to own additional contracted PPA rights. The Option to
acquire the Master PPA, if exercised by a board supported purchaser
of Western Wind, will provide that purchaser access to a total of
295 MW of contracted PPA's rather than the current 195MW. This is
an increase of 51% of total MW under contract that could be
acquired by a Board supported purchaser.
Shareholders are urged to consider the Amended
Offer carefully, and to read the Notice of Change which will be
filed by the Company shortly in its entirety before deciding
whether to accept or reject the Amended Offer. Any shareholder who
is in doubt as to how to respond to the Amended Offer, including
whether or not to tender or to withdraw his or her Shares, should
consult his or her own investment dealer, tax advisor, lawyer or
other professional advisor.
In the Notice of Change to the Supplementary
Directors' Circular issued by the Board of Directors on
January 23, 2013, the Company
provided information on certain discussions between the Company and
Brookfield and an indication from
Brookfield that an improvement to
the Offer may have been possible. On January 24, 2013, Brookfield announced that it had terminated
discussions regarding any alternative transactions to the
Offer.
The Company continues to pursue its application
with the Ontario Securities
Commission for an order requiring Brookfield to prepare and disclose the results
of a formal valuation in compliance with Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101") as part of the Offer.
On January 28,
2013, Brookfield also
announced that shareholders holding 9,031,300 Western Wind Shares,
or 15.27% of the Shares held by shareholders independent of
Brookfield ("Independent
Shareholders"), have entered into lock-up agreements with
Brookfield (the "Lock-Ups"). The
Lock-Ups will terminate if another offer is made for consideration
of 5% more than the price under the Offer. Brookfield also announced that it has been
advised that an additional 3,971,713 Western Wind Shares,
representing approximately 6.7% of the Shares held by Independent
Shareholders, will also potentially be tendered to the Offer (the
"Intentions to Tender"). Therefore, Brookfield has stated that based on the number
of Western Wind Shares that are subject to the Lock-Ups and the
Intentions to Tender, shareholders holding 13,003,013 Western Wind
Shares, representing approximately 21.97% of the Shares held by
Independent Shareholders, have indicated that they will tender to
the Offer. The Company wishes to note that, according to
Brookfield's public statements,
the Western Wind Shares that are subject to the Lock-Ups and the
Intentions to Tender have not actually been tendered to the Offer.
It is impossible to tell how many Western Wind Shares have been
actually tendered to the Offer.
Given public statements made by Brookfield regarding the number of Western
Wind Shares that are subject to the Lock-Ups and the Intentions to
Tender, the Company wishes to note the following regarding the
minimum tender condition relating to the Offer as well as
Brookfield's ability to acquire
Western Wind Shares not deposited to the Offer:
- It is a condition of the Offer that half of the Western Wind
Shares held by Independent Shareholders are tendered to the Offer
(the "Minimum Tender Condition").
- If, within four months after the date of the Offer, the Offer
has been accepted by shareholders who, in the aggregate, hold at
least 90% of the Western Wind Shares (other than Western Wind
Shares held by Brookfield as of
the date of the Offer), Brookfield
has stated that it intends, subject to compliance with applicable
laws, to acquire (the "Compulsory Acquisition") all the remaining
Western Wind Shares on the same terms that the Western Wind Shares
were acquired pursuant to the Offer, pursuant to the provisions of
applicable corporate law. Western Wind Shares held by Brookfield as of the date of the Offer will
not be counted towards the 90% threshold for a Compulsory
Acquisition.
- If Brookfield acquires less
than 90% of the Western Wind Shares, Brookfield may pursue other means of acquiring
the remaining Western Wind Shares not deposited under the Offer (a
"Subsequent Acquisition Transaction"). In order to complete a
Subsequent Acquisition Transaction, Brookfield must, after taking up Western Wind
Shares under the Offer, own at least 66 ⅔% of the outstanding
Western Wind Shares on a fully-diluted basis and sufficient votes
must be cast by "minority" holders to constitute a majority of the
"minority" pursuant to MI 61-101. Brookfield has stated that it intends to cause
the Western Wind Shares acquired under the Offer to be voted in
favour of such a Subsequent Acquisition Transaction and, to the
extent permitted by applicable laws, to be counted as part of any
minority approval that may be required in connection with such
transaction. However, Western Wind Shares held by Brookfield as of the date of the Offer will
not be counted as part of any such minority approval.
Jeff Ciachurski, CEO of Western Wind states
"We are proud to have all of our relationships work together to
add significant value for the benefit of our shareholders during
the sales process. An executed 100 MW solar PPA is a significant
asset especially given 74% of Puerto
Rico's electrical generation is derived from burning dirty
and volatile priced oil. This fact allows strong PPA pricing for us
but yet affords the Power Authority with a cheaper and cleaner
pricing option for the rate payers of Puerto Rico. We expect any purchaser of
Western Wind to consider this a major benefit in their
valuation."
ABOUT WESTERN WIND ENERGY CORP.
Western Wind is a vertically integrated
renewable energy production company that owns and operates wind and
solar generation facilities with 165 net MW of rated capacity in
production, in the States of California and Arizona. Western Wind further owns
substantial development assets for both solar and wind energy in
the U.S. The Company is headquartered in Vancouver, BC and has branch offices in
Scottsdale, Arizona and
Tehachapi, California.
Western Wind trades on the TSX Venture Exchange under the symbol
"WND", and in the United States on
the OTCQX under the symbol "WNDEF".
The Company owns and operates three wind energy
generation facilities in California, and one fully integrated combined
wind and solar energy generation facility in Arizona. The three operating wind
generation facilities in California are comprised of the 120MW
Windstar, the 4.5MW Windridge facilities in Tehachapi, and the 30MW Mesa wind generation
facility near Palm Springs.
The facility in Arizona is the
Company's 10.5MW Kingman
integrated solar and wind facility. The Company is further
developing wind and solar energy projects in California, Arizona, and Puerto
Rico.
ON BEHALF OF THE BOARD OF DIRECTORS
"SIGNED"
Jeffrey J. Ciachurski
President & Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements contained in this news
release may constitute forward-looking information under applicable
Canadian securities legislation. These statements relate to
future events and are prospective in nature. All statements
other than statements of historical fact may constitute
forward-looking statements or contain forward-looking information.
Forward-looking statements are often, but not always, identified by
the use of words such as "may", "will", "project", "predict",
"potential", "plan", "continue", "estimate", "expect", "targeting",
"intend", "could", "might", "seek", "anticipate", "should",
"believe" or variations thereof. Forward-looking information
may relate to management's future outlook and anticipated events or
results and may include statements or information regarding the
future plans or prospects of the Company.
Forward-looking information is based on certain
factors and assumptions regarding, among other things, the exercise
of the Option and value that might be derived from the Master PPA,
the outcome of a hearing before the OSC, if such hearing occurs,
the results of a valuation, if obtained by Brookfield, and the availability of a
financially superior offer. Several factors could cause
actual results to differ materially from those expressed in the
forward-looking statements, including, but not limited to: the
ability to exercise the Option and realize value from the Master
PPA, the outcome of a hearing before the OSC, if such hearing
occurs, the results of a valuation, if obtained by Brookfield, may not be as anticipated by the
Company, actions taken by Brookfield, actions taken by the Western Wind
Shareholders in relation to the Offer, the possible effect of the
Offer on the Company's business, the outcome of the Company's
previously-announced sale process, and the availability of
value-maximizing alternatives relative to the Offer.
Additional risks and uncertainties can be found in the Company's
MD&A for the year ended December 31,
2011 and the Company's other continuous disclosure filings
which are available at www.sedar.com.
Forward-looking statements and forward-looking
information involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated. Forward-looking
information is subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or
results to differ from those reflected in the forward-looking
statements including, without limitation: the risk that the Company
will not be able to exercise the Option or obtain any value from
the Master PPA, the risk that the outcome of a hearing before the
OSC will not be in the Company's favor, the results of the
valuation, if obtained by Brookfield, will not be as anticipated by the
Company, the progress of Western Wind's sales process, and,
assuming the Company receives an expression of interest from a
prospective purchaser, whether a financially superior offer for
Western Wind emerges, whether the Company is able to successfully
negotiate a prospective sales transaction and whether the
conditions of any proposed transaction, including receipt by the
Company of all necessary approvals, are met.
The Company believes that the expectations
reflected in the forward-looking statements contained in this news
release are reasonable, but no assurance can be given that they
will prove to be correct. Actual results and future events
may differ materially from those anticipated and accordingly
forward-looking statements should not be unduly relied upon.
Forward-looking statements contained in this document speak only as
of the date of this news release. Except as required by
applicable law, Western Wind disclaims any obligation to update any
forward-looking information.
SOURCE Western Wind Energy