Northland Power Cashing In Its Shares for Gemini OW Project

Northland Power Inc. has decided to raise money for the investment in the Gemini offshore wind project by offering its shares to the public in Canada.

The company announced yesterday that it has entered into an agreement with a syndicate of underwriters led by CIBC and BMO Capital Markets to issue to the public in Canada subject to regulatory approval, on a bought deal basis, 9,375,000 of common shares at a price of CAD16.00 per Common Share, representing CAD150 million of gross proceeds, and CAD75 million aggregate principal amount of 5.00% extendible convertible unsecured subordinated debentures.

“Northland intends to use the proceeds of the Offering, net of the underwriters’ fees, and the proceeds of the Private Placement to fund a portion of Northland’s equity commitment and subordinated loan to project Gemini (as further described below) and for general corporate purposes,” the company explained.

The total capital cost of the Gemini offshore wind project is projected to be approximately EUR2.8 billion and is expected to be funded from a combination of non-recourse project debt, subordinated debt and equity.

Northland’s total investment, including its pro-rata share of the equity and subordinated debt financing, is expected to be approximately CAD550 million, at current exchange rates, which will be satisfied through this Offering, the Private Placement, and borrowings under its corporate credit facility and available cash balances.

The next significant milestone date is the closing of the debt and equity commitments for the offshore wind project, which is scheduled to take place by June 30, 2014.

As previously announced, Northland has entered into agreements to acquire a 60% equity interest in the Gemini offshore wind project, a 600 MW offshore wind project located approximately 85 kilometers off the coast of the Netherlands in the North Sea.

The project was awarded 15-year electricity off-take agreements by the Government of the Netherlands in 2010. Once operational, the project will be one of the largest wind farms in the world, with anticipated electricity production capable of powering more than 785,000 households. The project is expected to be completed in 2017.

Source: Northland Power; February 25, 2014; Image: typhoonoffshore