* Algonquin, Emera to form new company called Calpeco
* Calpeco to buy certain NV Energy assets for $116 mln *
Deal expected to close in mid 2010
* Algonquin, Emera to own 50 pct each of Calpeco
* Algonquin shrs up 12 pct, Emera shrs up about 2 pct
April 23 Algonquin Power Income Fund APF_u.TO
and Emera Inc (EMA.TO) will jointly buy California-based
electrical generation and regulated distribution utility assets
from NV Energy Inc NVE.N for about $116 million.
The companies will jointly own and operate the NV Energy
assets (California utility) through a newly formed company
called California Pacific Electric Company, or Calpeco,
Algonquin said in a statement.
Algonquin said it will offer to employ about 50 people,
including all current operation and customer service employees,
at the California utility.
Through Calpeco, Algonquin and Emera will seek debt
financing for about half the purchase price of the California
utility, with the balance being satisfied through equal equity
contributions from Algonquin and Emera.
Energy and services company Emera has agreed to a treasury
subscription of about 8.5 million trust units of Algonquin at a
price of C$3.25 a unit, which is expected to represent 9.9
percent of the outstanding units after the subscription,
Funding under the private placement is planned to occur
simultaneously with the acquisition and Algonquin intends to
use the proceeds to largely fund its part of the equity
commitment for the deal of about $27 million.
Algonquin said its share of Calpeco's operations is
expected to add about $15 million of revenue.
The California utility is expected to provide Algonquin and
Emera future investment opportunities in regulated utility
assets and development of renewable power generation given its
It is located in one of the United States' most popular and
affluent tourism destinations and will benefit from the growing
California renewable portfolio standards.
Algonquin also said that current Emera Chief Executive
Chris Huskilson will be invited to join its board.
Algonquin units were up 12 percent at C$2.80, and Emera
shares were trading up about 2 percent at C$20.13 in afternoon
trade on the Toronto Stock Exchange.
($1=1.240 Canadian Dollar)
(Reporting by Isheeta Sanghi in Bangalore; Editing by Himani