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Algonquin Power & Utilities Corp. (AQN-T) has agreed to sell its renewable energy business to a subsidiary of New York-based LS Power for up to $2.5 billion US.
Oakville, Ont.-based Algonquin announced it would pursue the sale in August 2023 to reduce its debt and move into becoming a pure-play regulated utility.
“This major milestone, coupled with our previously announced agreement to support the sale of our Atlantica shares, delivers on our plan to transform AQN into a pure-play regulated utility, optimize our regulated business activities, strengthen our balance sheet, and enhance our quality of earnings,” Chris Huskilson, CEO of Algonquin, said in a release.
The renewables business includes 44 assets that are mostly wind and solar in Canada and the U.S. that make up more than 3,000 megawatts (MWs) of capacity. It also has an 8,000-MW pipeline of wind, solar, battery energy storage and renewable natural gas projects in various stages of development, LS Power says in a release. Most of the assets - 2,700 MWs-worth - are in the U.S.
The sale is expected to be made up of $2.28 billion US in cash and up to $220 million US in cash pursuant to an earn out agreement for certain wind assets.
If approved by the U.S. Federal Energy Regulatory Commission and under other competition laws, Algonquin expects the transaction to close in Q4 or Q1 2025. Algonquin anticipates receiving approximately $1.6 billion US in cash proceeds.
About LS Power and Algonquin
Energy developer and investor LS Power says it it has developed, constructed, managed and acquired over 47,000 MWs of power generation, with sustainable projects in the mix.
It maintains solar, wind, hydro and battery storage projects, as well as coal and natural gas assets, all in the U.S.
It formed REV Renewables in 2021 to deploy renewable energy and energy storage projects.
Algonquin held $17 billion US in assets as of Dec. 31, 2023. In its Q2 financials, it reported $599 million US in revenue, compared to $628 million US in the same quarter last year – a five per cent decrease.
Net earnings were $159 million US, compared to a loss of $262 million in Q2 2023.
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