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Algonquin buys 25% stake in Atlantica Yield for $608m

Published 12 March 2018

Algonquin Power & Utilities has acquired a 25% stake in Atlantica Yield, a yieldco that owns contracted renewable energy, power generation, electric transmission assets and others in North and South America, for $608m.

Algonquin has an option to acquire an additional 16.47% stake in Atlantica Yield for a period of 60 days after the closing of the 25% acquisition.

The closing of this transaction represents the beginning of a new partnership between Atlantica and its largest shareholder, Algonquin.

As part of this partnership, the ROFO agreement signed with AAGES, the joint venture which will focus on the development and construction of clean energy and water contracted assets, has become effective.

Additionally, the shareholders agreement signed between the parties has also become effective. The projects expected to be undertaken by AAGES under the ROFO in favor of Atlantica represent an important source of future growth for Atlantica.

Algonquin CEO Ian Robertson said: "The completion of these transactions is a significant milestone. Through Atlantica, Algonquin benefits from having an experienced international operator for new projects developed by AAGES as well as an interest in an attractively-priced portfolio of high quality, international operating assets that is accretive to Algonquin's earnings and cash flow per share."

Atlantica CEO Santiago Seage said: "We are extremely excited with the closing of this transaction, looking forward to working closely with Algonquin. We have a strong industrial sponsor willing to support us going forward."

Taking into account our new sponsor, the new ROFO agreement and the internal and external opportunities we are seeing, we have set a dividend per share growth target of 8-10% compounded annual growth rate ("CAGR") through 2022.

In addition, pursuant to the consent signed with the Department of Energy which reduces the minimum ownership required by Abengoa in us from 30.0% to 16.0%, Solana received $77.5 million from Abengoa on March 8, 2018.

From this amount, $52.5 million is expected to be used to repay finance project debt and $25 million are expected to cover other current and potential future Abengoa obligations.

Additionally, Solana received $42.5 million in December 2017, which was used to repay project finance debt.

Source: Company Press Release