U.S. energy company buys Creststreet's wind farms
Units are in Nova Scotia and Quebec
Creststreet Power & Income Fund LP is selling two Canadian wind farms to a U.S. buyer largely because of the federal government's tax changes for income funds, the company said Friday.
Calgary-based Creststreet said it has a deal to sell the farms — Mount Copper Wind Power Energy Inc. in Murdochville, Que., and Pubnico Point Wind Farm Inc. in southwest Nova Scotia — to a unit of FPL Group, a giant Florida energy company, for $121.6 million.
The sale followed an internal review begun mainly because of Ottawa's decision to tax distributions from income funds, Robert Toole, Creststreet president and CEO, said in a release.
"In the end, it was determined that the best course of action for unit holders was to realize on the partnership's assets, distribute the proceeds to unit holders and wind up the partnership," he said.
The firm said it estimates it will pay out $6.63 for each unit. Creststreet units were up 7 per cent or 42 cents, to $6.42, in mid-afternoon TSX trading. The 52-week trading range is $4.99 to $6.68.
The $6.63 is a premium of just over 20 per cent to the trading price of the units prior to Nov. 7, 2007, the last day before it announced the review.
The $6.63 depends on other deals, including how much Creststreet makes from its investment in Kettles Hill Wind Energy Inc., a 35-turbine farm in southern Alberta. Creststreet has a $35.9 million investment in Kettles Hill notes, which it now estimates are worth $49.7 million.
Unit holders must approve the deal at a meeting set for June.