* 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 (Adds details)
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, Algonquin said.
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 location.
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 Sarkar)