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LONDON, UK / ACCESSWIRE / May 29, 2018 / If you want access to our free research report on Pattern Energy Group Inc. (NASDAQ: PEGI), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=PEGI as the Company's latest news hit the wire. On May 24, 2017, the Company announced that it has signed an agreement with affiliates of Arroyo Energy Investors to sell the Company's operations in Chile. The all-cash deal is valued approximately $67 million. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Sharing the Company's rationale behind the divestment of the Chilean operations, Mike Garland, CEO of Pattern Energy, said:
"The price represents a 30 percent uplift over El Arrayán Wind's contribution to the Company's current value. While the purchase price demonstrates material embedded value in our assets, the primary reason for the sale was strategic. Chile was a good candidate for sale as it was one of the higher cost operations in our fleet because of the distance from the rest of our operations and the different legal, tax and regulatory environments."
Details of the Divestment
Pattern Energy's operations in Chile includes an 81 megawatt (MW) owned interest in the 115 MW El Arrayán Wind project. Affiliates of Arroyo Energy Investors have agreed to pay $67 million in cash for Pattern Energy's Chilean operations. The offer price represents a cash available for distribution (CAFD) multiple that is higher than the CAFD multiple for projects the Company has acquired in the past. The deal is expected to close in within 90 days of the signing of the agreement subject to customary closing conditions.
With the divestment, the Company expects that it will reduce annual spending of over $1 million related to administrative expenses of managing the operations in Chile. The Company plans to utilize the proceeds from the sale of operation for general corporate purposes including reducing of debt, strategic acquisitions, share buyback, etc.
The sale of El Arrayán Wind project was conducted simultaneously along with the sale of Conejo Solar project which is owned by Pattern Energy Group LP. The Conejo Solar project is also being sold to Arroyo. The Conflicts Committee of the Board of Directors of Pattern Energy reviewed the sale of El Arrayán Wind project after taking the Company's conflict of interest policies into consideration. Accordingly, Pattern Energy waived off its Right of First Offer (ROFO) for the Conejo Solar project. The Company's Board approved the sale of El Arrayán Wind project and the ROFO for the Conejo Solar project.
About the El Arrayán Wind project
The El Arrayán Wind project is located on the coast of Chile nearly 400 km north of Santiago. The 115-MW wind project started full commercial operations in Q2 2014. Pattern Energy has an 81-MW owned interest in the plant and sells around 70% of the energy produced to Minera Los Pelambres via long-term fixed-for-floating hedge.
About Pattern Energy Group Inc.
San Francisco, California--based Pattern Energy is a leading independent renewable energy company in the US. The Company maintains, owns, and operates several renewable energy projects. The Company has a portfolio of 24 wind and solar power facilities across US, Canada, and Japan. It has a total owned interest of 2,861 MW in these projects. The Company's renewable projects generate stable, long-term cash flows as each project is contracted to sell all or a majority of its electricity output on a long-term, fixed-price energy sale agreement.
About Arroyo Energy Investors
Arroyo is an independent, energy investment firm that makes energy investments in the power generation and midstream space in North and South America. The investment firm has office in Woodlands, Texas and Santiago, Chile.
Stock Performance Snapshot
May 25, 2018 - At Friday's closing bell, Pattern Energy Group's stock rose 1.38%, ending the trading session at $18.40.
Volume traded for the day: 785.71 thousand shares.
Stock performance in the last month – up 0.93%
After last Friday's close, Pattern Energy Group's market cap was at $1.79 billion.
Price to Earnings (P/E) ratio was at 17.97.
The stock has a dividend yield of 9.18%.
The stock is part of the Utilities sector, categorized under the Diversified Utilities industry. This sector was up 0.2% at the end of the session.
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