Sprott Power to acquire Shear Wind in Canada

Sprott Power has signed an agreement to buy all the issued and outstanding shares of Shear Wind for C$33m ($33.2m) and acquire the two operating and a few developing wind projects from the company.

Sprott Power will also pay the debt of Shear Wind assumed to be C$55m ($55.3m) which is offset by C$5m ($5m) cash in hand.
Shear Wind’s operating assets located in Nova Scotia have a total generating capacity of 63.7MW including the 51% in the Glen Dhu wind farm and 100% interest in the operating Fitzpatrick Mountain wind farm.

Sprott Power president and chief executive officer Jeff Jenner said the acquisition will increase the assets of Sprott Power from a portfolio including 80 MW currently operating or under construction to 144 MW operating under management when the expected mid October closing occurs.

"Shear Wind’s development pipeline is also attractive, given its size and location throughout Canada," Jenner added.

The development assets of Shear Wind have a cumulative capacity of 860MW which are in different developing stages.

Upon completion of the acquisition, Sprott Power will close a working agreement with Genera Avante Holdings Canada (GAHC) and Wind Canada Investments, to form joint ventures and manage the operating facilities and complete the development projects.

GAHC and Wind Canada Investments, both subsidiaries of Genera Avante, will offer a cash payment of C$1.8m ($1.81m) to Sprott Power to increase the ownership of GAHC in the Glen Dhu wind farm to 51% from the current 49% and purchase of 50% in the Fitzpatrick Mountain wind farm.

The Glen Dhu wind farm has a 20 year power purchase agreement with Nova Scotia Power (NSPI) and a 15-year PPA for the Fitzpatrick Mountain wind farm.

Sprott Power has entered an agreement with a syndicate of underwriters led by Canaccord Genuity to sell extendible convertible unsecured subordinated debentures worth C$30m ($30.1m) to finance the acquisition.

The deal between Sprott and Shear Wind is expected to be closed in mid-October of 2012.

Image: Sprott Power to buy Shear Wind’s operating and developing wind projects in Canada. Photo: Charles Cook