Boralex to use cash, revolvers, C$255 term loan, C$100 million bridge loan, share sale to fund buyout

By Lisa Kerner

Charlotte, N.C., Dec. 15 – Boralex Inc. announced it has funding in place to acquire all of the issued and outstanding shares of Enel Green Power France SAS for a total net consideration of C$400 million (€280 million), payable in cash.

Boralex submitted a binding offer to acquire Enel, a subsidiary of Enel Green Power International BV.

The company has secured financing to pay the purchase price in cash at closing, fund the remaining capital expenditures related to the project of about C$14 million (€10 million), and fund required financing reserves and transaction-related costs.

Boralex will use cash on hand, availability under its existing revolving credit facility and the following financing sources to fund the transaction:

• C$255 million (€178 million) from a 15-year non-recourse term loan facility structured and fully underwritten by BNP Paribas SA at an all-in rate of about 3% per year. The term loan will be entirely amortized over the 15-year period and may be increased by C$36 million (€25 million) upon certain conditions within 12 months of closing. The company will use C$14 million (€10 million) to cover the remaining capital expenditures;

• C$45 million increase to the existing revolving credit facility to C$175 million, with a new C$50 million accordion feature. Boralex’s credit facility expires in 2018; and

• C$100 million bridge credit facility provided by National Bank of Canada that will be repayable with the proceeds from a subscription offering.

Subscription receipt offer

Boralex entered into an agreement with National Bank Financial Inc. on behalf of a syndicate of underwriters to sell, on a bought-deal basis, subscription receipts (or common shares of Boralex) of Boralex for C$110 million, according to the release.

Net proceeds will be used to repay amounts drawn under the bridge credit facility as well as for working capital and general corporate purposes.

Under the agreement, Boralex will issue 8.43 million subscription receipts at a price of C$13.05 per subscription receipt for gross proceeds of about C$110 million and, if the over-allotment option is exercised, up to about C$127 million.

The subscription receipts are exchangeable on a one-for-one basis for common shares of Boralex. The offering is scheduled to close on or about Jan. 12.

C$22 million wind farm sale

As part of the Enel transaction, Boralex will also temporarily acquire a 10 MW wind farm, currently subject to a sale agreement to a third party for C$22 million (€15 million). The closing of the ‘Pecou transaction’ is expected by year-end, according to a news release.

Subsequently, the total purchase price related to the acquisition of all of the outstanding shares of Enel will be C$422 million (€295 million). Once the Pecou transaction is completed, Boralex will entirely recover the C$22 million (€15 million), the release stated.

With the addition of Enel Green, Boralex will add to its French portfolio of 12 wind farms with a total installed capacity of 186 MW located in seven different regions of France.

Boralex is a Kingsey Falls, Quebec, power-generating company.

The Enel Group develops and manages renewable energy sources and is located in Rome. Enel Green Power France is based in Lyon, France.

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