TSX.V Symbol: "WND"
OTCQX Symbol: "WNDEF"
Issued and Outstanding: 70,656,722
VANCOUVER,
Feb. 17, 2013 /CNW/ - Jeff Ciachurski
wishes to personally respond to Tom
Konrad's promotional news article dated February 13, 2013.
There was a series of phone calls between Jeff
Ciachurski, CEO of Western Wind Energy and Tom Konrad, a contributing writer to
Forbes. After this discussion, Mr. Konrad produced an article
titled "Why I'm Accepting Brookfield Offer for $2.60 per Share for Western Wind." In
this Article, Mr. Konrad makes a series of naked assertions.
To set the record straight, Mr. Ciachurski is responding to each of
Mr. Konrad's subject paragraphs. We are hopeful that Mr.
Konrad will reproduce, verbatim, this rebuttal from Jeff
Ciachurski.
Mr. Konrad's first paragraph is entitled
"What Changed My Mind" and in this paragraph Mr. Konrad
talks about speaking to fund managers and Brookfield's head of media relations.
Jeff Ciachurski responds by saying that
Brookfield's Head of Media
Relations can only disclose the party line of Brookfield. Brookfield's CEO or CFO had refused to speak
with Tom Konrad. Regarding the
hedge fund managers who spoke with Tom
Konrad, most are "event driven" fund managers who solely
purchased stock when the Company was put up for sale or when they
were aware that a sales process was imminent. Together, these
event driven funds constitute approximately 13 million shares or
the vast majority of the parties who have tendered. In fact,
it was these funds that contacted Brookfield and agreed to tender if the bid was
raised to $2.60. These funds
became so over-weighted with our stock in a situation where they
had a limited timeline, that there was no other alternative but to
tender.
Mr. Konrad's second paragraph is entitled
"The Situation As I Now See It." In this paragraph,
Mr. Konrad gives an opinion as to what buyers will pay; states our
lack of intention to sell; declares no value to Yabucoa; states
Western Wind's share price will decline significantly if the bid
expires; states allegations of alienating possible buyers; and Mr.
Konrad's view that he can sway the public to whether or not
Brookfield wins the vote.
"What Buyers Will Pay - Why Not More Than
$3"
Mr. Ciachurski replies that Mr. Konrad is
unaware that hostile bids for independent power producers are
virtually non-existent. The best-suited and most efficient
purchasers for Western Wind are US regulated utilities and their
non-regulated subsidiaries. Mr. Konrad fails to understand
that executive committees within these utilities will not bid on a
company, simply for a break-up fee and incur the public disdain
within their regulated jurisdiction, of getting into a hostile
bidding war against an insider such as Brookfield, who holds a below market price
share position. Brookfield
knows this and the only hope of Western Wind shareholders getting a
better price is by Brookfield not
obtaining the minimum tender and publicly saying it is walking
away. As I have stated to Mr. Konrad several times, this is a
battle between Brookfield and the
Western Wind shareholders and not between Brookfield and Jeff Ciachurski. My job
is to give guidance and if Mr. Konrad feels that his investment
advice has overreaching logic and conclusions, this is another
feather in the cap for Brookfield.
"Lack of Intention to Sell - Ciachurski's
Compensation"
In this paragraph, Mr. Konrad wrongly states
that there will be two change of control payments. There is
only one and that was paid just before the Company's AGM as a
precaution that either Savitr or Brookfield, if successful, in either the proxy
battle or subsequent hostile bid, would not honor any of the
employees' pre-established change of control payments. It is
standard in a hostile environment, whether by proxy battle or
hostile bid, that the non-incumbent winning party, not honor any
employment agreement. This leads to years of litigation and
in the case of the proxy battle, would have led to a diminished
sales price. Mr. Konrad further fails to state that Jeff
Ciachurski is one of the largest shareholders and stands to benefit
the greatest from any increase in value.
"Declares No Value to Yabucoa - Financing
Yabucoa"
Jeff says Mr. Konrad turns on its head, the
entire basic principles of project finance. The most
efficient cost of capital is bank debt. Currently, project
financed debt is available at LIBOR +2.75 therefore, the more bank
debt on any project, the more superior returns to the project
sponsor. The more equity in a project, the lower the rate of
return. Equity rates of return are much higher than bank debt
therefore, companies that have to sell copious amounts of corporate
equity to meet a project equity requirement, are lowering the
project's total yield. No bank with an "A" rating or better,
can simply increase the interest rate to meet a perceived serious
risk of default.
Similar to Windstar and Kingman, the rates we received, were the
lowest rates available, at that particular time, to any
party. In the case of Windstar, where we had an institutional
lending group (life insurance companies), rather than banks, the
interest rate is higher because it is fixed for 21 years and does
not have any interest rate hedging costs, which, at the end of the
day, becomes a more stable and predictable expense, yet at a total
costs similar to the bank debt with swaps. In fact our audited
financial statements show we have raised only $70 Million in total corporate book equity since
incorporation. However we control $430
Million in assets and have a hostile bidder valuing that
total corporate equity at $190
Million. This is a superior conclusion unmatched by the
Yieldco's quoted by Mr. Konrad who do not trade more than their
book share equity value.
"The Stock Will Fall"
Jeff says the statement by Mr. Konrad that the
stock price will fall is contrary to his earlier paragraph where he
states that the Company is worth more than $2.60 per share. However, Mr. Konrad does
not clarify whether he is a "value investor" or a "stock
trader." He is certainly not a pure clean energy
investor. This is verified within Mr. Konrad's February 13th article where he states
"Brookfield and Algonquin are the
largest pure play renewable companies in North America." Mr. Konrad claims to own
shares of both. According to Algonquin's financial statements
and website, Algonquin is a significant fossil fuel generator and
utility distributor of fossil fuels. This makes Mr. Konrad not a
"pure" clean energy investor therefore; his recommendation of the
stock dropping can only be that of a view from a short-term stock
trader. We cannot predict what the price of Western Wind will
do in the short term but we do know that Mr. Konrad believes the
shares are worth more than $2.60.
"Alienating Buyers"
Jeff says Western Wind has been public since
December 23, 1999 and until
July 30th, 2012, has never
agreed to put itself up for sale. There is simply no history
or record of alienating buyers. Algonquin issued a hostile
"bear hug letter" in October of 2011 and Savitr launched a proxy
battle on July 31st,
2012. On November 23, 2012,
Brookfield stated its intentions
of launching a hostile bid. For the past 16 months, Western
Wind has been under hostile attempt from two parties, with the
Brookfield hostile bid being proxy
war 2.0. We would like to invite Mr. Konrad to offer the
public his version of "How Not to Alienate Hostile Bidders."
"Our Decision Makes a Difference"
Jeff says Mr. Konrad takes pride in the fact
that his newsletter may be able to sway shareholders to tender to
the Brookfield bid. He does
that by saying he would rather take $2.60 now than waiting 3-4 months for an extra 5%
- 8%. None of these arguments are supported by fact, simply
Mr. Konrad's desire to cash-out on a share position unknown to the
public. The public is also unaware as to when Mr. Konrad buys
or sells shares, in relationship to his "Buy and Sell" opinion
letters. Such is the field in the unregulated game of
newsletter writers. If Mr. Konrad succeeds in swaying the
public opinion to sell at $2.60, he
did so for his own personal gain rather than helping increase the
value of the share price deserving to the Western Wind
shareholders.
At the end Mr. Konrad fails to state that under
Jeff Ciachurski's leadership, Western Wind helped create hundreds
of high paying true green energy jobs. Western Wind paid tens of
millions in sales taxes, millions in taxes to the Countries in
which it does business and millions per year in additional land
taxes for its assets. Western Wind was a 35-cent IPO in December
1999 and even at only $2.60,
is the green energy market leader with a Combined Annual Growth
Rate on share value of 20% per year, each and every year since
2000. Asset growth is a staggering 60% annually since 2000.
Virtually every other green energy company has failed to meet these
exceptional targets or simply failed completely.
JEFFREY CIACHURSKI
Shareholder of Western Wind Energy Corp.
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
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
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 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