UPDATE 1-Hedge fund Starboard urges Algonquin Power to sell renewable assets
(Updates with Algonquin's comment in paragraph 7)
July 6 (Reuters) - Activist hedge fund Starboard Value on Thursday urged utility firm Algonquin Power & Utilities to sell a majority of its renewable assets to reduce debt and improve earnings.
Algonquin is grappling with a $7.5 billion debt burden following a series of acquisitions in recent years.
It said in May it would launch a review of its renewable energy group, following a push by Corvex Management and other activist firms for changes.
"We believe the remaining regulated utility business, once the unregulated business is sold, should be highly attractive to public market investors," Starboard said in the letter to Algonquin on Thursday.
Starboard is the largest shareholder in Algonquin, with a 7.5% stake.
The renewable assets that the hedge fund urged to divest include Algonquin's 42% stake in Atlantica Sustainable Infrastructure, which also launched a strategic review in February to evaluate its options.
"While the strategic review process includes assessing a potential sale or spin-off of the Renewable Energy Group, the Board is reviewing alternatives with a view to positioning each business," said Algonquin in an emailed statement.
Shares of the company fell 1.6% to C$10.94 on Thursday. (Reporting by Sourasis Bose in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)
