Alterra Power Announces Final Settlement of Icelandic Bond

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Alterra Power Announces Final Settlement of Icelandic Bond

PR Newswire

TSX : AXY

VANCOUVER, July 28, 2017 /PRNewswire/ - Alterra Power Corp. ("Alterra" or the "Company") announces that its subsidiary, Magma Energy Sweden ("MES"), has entered into an agreement to settle its US$71.3 million non-recourse bond (valued as at June 30). The collateral under the bond, comprising a 12.7% ownership stake of Alterra's Icelandic subsidiary HS Orka hf ("HS Orka"), will be delivered to the bondholder Fagfjárfestasjóðurinn ORK in full and final settlement of MES's obligations under the bond. Completion of the agreement is subject to certain conditions to be satisfied within 60 days and upon completion Alterra's ownership stake in HS Orka will be reduced from 66.6% to 53.9%. Alterra, through MES, will continue managing HS Orka and consolidating its financial results.

Update to Outlook for Years Ended December 31, 2017 and 2018

In conjunction with its release of financial and operating results for the year ended December 31, 2016, Alterra provided an outlook on expected financial and operating results for 2017 and 2018. Following the change in ownership of HS Orka, management expects the following changes to the Company's outlook (all provided on a net interest1 basis, tabular amounts expressed in thousands of US dollars, except generation).









Original
forecast
2017

Revised
forecast
2017

Difference

Original
forecast
2018

Revised
forecast
2018

Difference

Generation (GWh)

1,595

1,526

(69)

2,046

1,886

(160)

Revenue

90,659

86,517

(4,142)

100,719

92,239

(8,480)

Adjusted EBITDA2

49,154

47,193

(1,961)

56,610

51,920

(4,690)



(1)

Forecasted outlook reflects Alterra's "net interest", by which the Company means the effective portion of operating results that the Company expects to report for each of HS Orka (66.6% until July, 2017 and 53.9% thereafter), Toba Montrose (40%), Jimmie Creek (51%), Dokie 1 (25.5%), Shannon (50% sponsor equity interest), and Kokomo (90.0% sponsor equity interest) reflecting Alterra's expected share of ownership through 2017 and 2018, and inclusion of Spartan minimum 85% sponsor equity interest) and Flat Top (51% sponsor equity interest) from January and April 2018, respectively. Management believes that net interest reporting, although a non-IFRS measure, provides the clearest view of Alterra's performance. Refer to our MD&A for further information on non-IFRS measures.

(2)

Here and elsewhere, Adjusted EBITDA is defined by the Company as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as adjustments for changes in the fair value of holding company bonds (Sweden) and derivatives, write-offs of development costs, other income (expense) except business interruption insurance proceeds, amortization of below market contracts, value assigned to options granted, share of results of equity investments, the Company's proportionate interest in Adjusted EBITDA of its equity investments, research and development costs for deep drilling program and non-recurring items (insurance deductibles, litigation and arbitration costs). Adjusted EBITDA has been calculated on a consistent basis with the comparative year. The Company discloses Adjusted EBITDA as it is a measure used by analysts and by management to evaluate the Company's performance. As Adjusted EBITDA is a non-IFRS measure, it may not be comparable to Adjusted EBITDA calculated by others. In addition, Adjusted EBITDA is not a substitute for net earnings. Readers should consider net earnings in evaluating the Company's performance. For a reconciliation of consolidated Adjusted EBITDA to Alterra's consolidated financial statements refer to the Company's Management's Discussion and Analysis for the year ended December 31, 2016 available on SEDAR at www.sedar.com.

The revised forecasts reflect the ownership change in HS Orka as of July 2017, including 66.6% HS Orka ownership in the first half of 2017 and 53.9% HS Orka ownership in the second half of 2017 and all of 2018. Results of HS Orka include Adjusted EBITDA from the Blue Lagoon (30% owned by HS Orka) which was also revised following the ownership change in HS Orka. All other assumptions remain unchanged.

About Alterra Power Corp.

Alterra Power Corp. is a global renewable energy company that manages eight power plants totaling 825 MW of hydro, wind, geothermal and solar generation capacity in Canada, the USA and Iceland. Following the transaction, Alterra owns a 363 MW share of this capacity, generating over 1,500 GWh of clean power annually.

Alterra is also constructing the 200 MW Flat Top wind project in central Texas, which is expected to be in operation by 1H 2018 (51% owned by Alterra). Upon the completion of Flat Top, Alterra will operate nine power plants totaling 1,025 MW of capacity and will own a 465 MW share of this capacity, generating almost 2,000 GWh of clean power annually. Alterra also has an extensive portfolio of development projects and a skilled team of developers, builders and operators to support its growth plans.

Alterra trades on the Toronto Stock Exchange under the symbol AXY.

Cautionary Note Regarding Forward-Looking Information
Certain statements and information included in this news release are "forward-looking information" within the meaning of applicable securities laws that involve risks and uncertainties. Forward-looking information relates to future events or future performance and reflects management's expectations and beliefs regarding future events as of the date hereof. Examples of forward-looking information in this news release include the successful completion of the agreement, including satisfaction of the conditions thereunder, annual generation estimates, Alterra's continued management and consolidation of HS Orka's results, the successful construction of, and achievement of commercial operations for, the Flat Top and Spartan projects, satisfaction of conditions precedent to the tax equity investments thereto and all information provided under the Outlook heading. Forward-looking information is based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection. Since forward-looking information relates to future events and conditions, by its very nature it requires making assumptions and involves inherent risks and uncertainties. Alterra cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking information. Material risk factors and assumptions include the risk that a final settlement of the bond cannot be reached and those set out in the management's discussion and analysis section of Alterra's most recent annual and quarterly reports and in Alterra's Annual Information Form for the year ended December 31, 2016.

Although Alterra has attempted to identify important factors that could cause actual actions, events or results to differ materially from forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate and undue reliance should not be placed on forward-looking information. Except as required by law, Alterra undertakes no obligation to update any forward-looking information to reflect new information, subsequently or otherwise.

Cautionary Note Regarding Forward-Looking Financial Information
The information provided in the "Outlook" section of this news release constitutes forward-looking financial information within the meaning of applicable securities laws. Management has provided this information as of the date of this news release in order to assist readers to better understand the expected results and impact of the Company's operating and construction projects expected to be commissioned in the near term. Readers are cautioned that this information may not be appropriate for any other purpose, including investment purposes, and consequently, should not place undue reliance on this information. Forward-looking financial information also constitutes forward-looking statements within the context of applicable securities laws and as such, is subject to the same risks, uncertainties and assumptions as are set out above.

SOURCE Alterra Power Corp.

Copyright CNW Group 2017

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