Atlantic Power has agreed to acquire the remaining 50.1% of Pasco Cogeneration from its current partners. The acquisition is expected to close in late December.
Pasco owns and operates a 121MW gas-fired cogeneration facility located in Dade City, Florida in which Atlantic Power currently holds a 49.9% interest. Pasco sells electricity to Progress Energy Florida under a power sales agreement and has a 10-year tolling agreement with Tampa Electric Company.
Based on management’s current expectations of operating cash flow and debt service reserve releases, the acquisition of the remaining interest in Pasco is expected to increase distributions to Atlantic Power from Pasco by approximately $2.5 million in 2007 and $7 million in both 2008 and 2009.
Between 2010 and 2018, based on management’s expectations of operating performance and the terms of the tolling agreement with Tampa Electric Company, the additional ownership in Pasco is expected to provide additional distributions to the company of approximately $2 million per year.
The company expects to finance the equity purchase price of approximately $25 million with cash on hand. There is a total of $15 million of existing debt at Pasco that is non-recourse to Atlantic Power and matures on December 31, 2008.
Barry Welch, president and CEO of Atlantic Power, said: We are continuing to execute on our growth strategy by acquiring the remaining interest in this long-term, fully-contracted asset.