Capital Power will not receive any of the proceeds ($215 million, before giving effect to the over-allotment option) from the sale of common shares by EPDC.
The underwriters have also been granted an option to purchase up to an additional 450,000 common shares at the issue price to cover over-allotments, if any. If exercised, EPDC will receive additional gross proceeds of approximately $10.7 million. The over-allotment option is exercisable, in whole or in part, by the underwriters at any time up to 30 days after the closing of the offering. Capital Power will not receive any proceeds from the exercise of the over-allotment option.
The proceeds from the secondary offering will be used by EPCOR for repayment of commercial paper indebtedness and for general corporate purposes.
In connection with the offering, EPDC intends to exchange (the "Exchange") all of its remaining outstanding Exchangeable Common Limited Partnership Units of Capital Power L.P., not otherwise exchanged in connection with the secondary offering, for common shares of Capital Power in accordance with the terms of the Exchangeable Common Limited Partnership Units. After giving effect to the secondary offering, but before giving effect to the over-allotment option, EPCOR will indirectly own approximately 9.6% of the common shares of Capital Power.
EPCOR plans to eventually sell all or a substantial portion of its remaining interest in Capital Power subject to market conditions, based on its requirements for capital and other circumstances that may arise in the future. EPCOR anticipates that future sales of common shares by it will be completed by other means including through the facilities of the Toronto Stock Exchange, private agreement or other suitable arrangements available under applicable law. Additionally, as the Registration Rights Agreement between EPCOR and Capital Power will terminate in accordance with its terms following the secondary offering, Capital Power will no longer be obligated to assist EPCOR in making a secondary offering under a prospectus.
The common shares offered under the secondary offering will be offered in all provinces and territories of Canada by way of a prospectus supplement to a base shelf prospectus of Capital Power. The offering will also be extended to Qualified Institutional Buyers in the United States pursuant to the exemptions from registration provided by Rule 144A of the Securities Act of 1933, as amended (the "U.S. Securities Act"). Closing of the offering is expected to occur on or about April 2, 2015.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Capital Power in the United States or in any jurisdiction in which such offer, solicitation of sale would be unlawful. These securities have not been and will not be registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom.
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