Algonquin Power will seek to acquire Clean Power 6.75% convertibles via exchange offer

By Angela McDaniels

Seattle, Feb. 26 - Algonquin Power Income Fund said Algonquin Power Trust will make an offer to acquire all of the outstanding 6.75% convertible debentures issued by Clean Power Income Fund that are not beneficially owned by Algonquin Power Income Fund.

The offer is anticipated to be made by way of a take-over bid through the issuance, at the holder's option, of either:

• C$102.00 principal amount of 6.2% convertible debentures due Nov. 30, 2016 issued by Algonquin for each C$100 of 6.75% convertibles, together with accrued interest.

This figure represents an equivalent price of C$104.55 per C$100.00 of 6.75% convertibles, based on the Feb. 23 closing price of C$102.50 of Algonquin's existing 6.2% convertibles; or

• C$100.00 principal amount of 6.65% convertible debentures due Nov. 30, 2016 issued by Algonquin for each C$100.00 of 6.75% convertibles, together with accrued interest.

This figure represents an equivalent price of C$104.00 per C$100.00 of 6.75% convertibles, based on the Feb. 23 closing price of C$104.00 of Algonquin's 6.65% convertibles July 31, 2011.

The closing price of the 6.75% convertibles on Feb. 23 was C$100.50 per C$100.00 principal amount. The transaction values the outstanding Clean Power convertibles at about C$57.5 million.

Algonquin said it will mail the offer to the 6.75% convertibles holders on or before March 23 and that the offer will be conditioned upon the closing of Algonquin's offer to acquire all issued and outstanding trust units of Clean Power.

"The offer by Algonquin for the convertible debentures will allow holders continued participation in the independent power sector, improved counterparty creditworthiness and the opportunity to convert into highly liquid Algonquin Power Income Fund trust units," Ian Robertson, a senior manager of Algonquin, said in a fund news release.

"It is believed that the offer provides an attractive premium to holders of the convertible debentures compared to other alternatives available."

Under the trust indenture governing the 6.75% convertibles, holders may put their convertibles to Clean Power upon a change of control for a redemption amount of C$101.00 in cash or trust units for each C$100.00 principal amount of convertibles put, according to the release.

Algonquin is an Oakville, Ont.-based investment trust that owns and has interests in power-generating and infrastructure assets. It is the sole beneficiary of Algonquin Power Trust.

Clean Power Income Fund is a Toronto-based investment trust that is invested in 15 power-generating facilities.

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