Algonquin Power convertibles holders approve amendments at meeting

By Angela McDaniels

Tacoma, Wash., Aug. 17 - Algonquin Power Income Fund said that holders of its 6.65% convertible debentures due July 31, 2011 and 6.2% convertible debentures due Nov. 30, 2016 have approved amendments that reduce the threshold for the completion of a compulsory acquisition in connection with a proposed exchange offer for the convertibles.

The amendments also allow holders who do not tender their convertibles into the offer to be paid for their convertibles in shares or debentures. Holders who make no election will be paid in shares.

The amendments were being pursued in connection with the proposed acquisition by Hydrogenics Corp. of all of Algonquin's units and debentures.

An extraordinary resolution to make the amendments was approved by approximately 98.5% of the votes cast by holders at the meeting, according to a fund news release.

The proposed exchange offer was first announced on June 12. Algonquin expects to begin the offer in early September.

As reported in June, in exchange for each C$100 of the 6.65% convertibles, holders can choose either 31.152 common shares of Algonquin Power Inc. or C$105 principal amount of 7.5% convertible debentures due Nov. 30, 2014 issued by Algonquin Power with a conversion price of C$4.08.

The conversion price for the 6.65% convertibles is C$10.65.

The fund added that a maximum of C$40 million of common shares will be available under the first option.

In exchange for each C$100 of the 6.2% convertibles, holders will receive C$100 principal amount of 6.35% convertible debentures due Nov. 30, 2016 issued by Algonquin Power. The conversion price will be C$6.00 per share.

The conversion price for the 6.2% convertibles is C$11.00.

The fund will also pay accrued interest.

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.

Hydrogenics develops and provides hydrogen generation and fuel cell products and services and is based in Mississauga, Ont.

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