Algonquin Power & Utilities (APUC), a Canadian utility company, has closed its acquisition of an additional stake of 16.47% in Atlantica Yield for about $345m from Abengoa.
The transaction increases APUC stake in Atlantica Yield to about 41.5%.
Based in the UK, Atlantica Yield is a yieldco, which owns and operates a long-term contracted portfolio made up of 22 energy infrastructure assets, located across North America, South America and other selected global markets. Included in the portfolio is over 1.7GW of clean power generating capacity, 1,768kms of electric transmission lines, and two desalination plants.
APUC said that the portfolio of the yieldco complements its existing operations. Further, its commitment to international expansion is likely to consolidate Atlantica Yield’s prospects in the form of new assets, thereby fast tracking the growth of its cash available for distribution.
APUC CEO Ian Robertson said: “We are pleased to have completed this transaction as an element of our international expansion strategy.
“This incremental investment in Atlantica deepens our interest in an attractively-priced portfolio of high quality, international operating assets, one which is accretive to APUC’s earnings.”
For the Spain-based Abengoa, the transaction marks its exit from the UK-based yieldco.
In March 2018, APUC completed acquisition of a 25% stake in Atlantica Yield from Abengoa for about $608m. APUC and the Spanish firm had also created a joint venture dubbed as Abengoa-Algonquin Global Energy Solutions (AAGES) at the time of the deal.
Abengoa said that its exit from the yieldco was a central element of its divestment strategy and marks a decisive step forward in the viability process of the company in the medium-term.
Abengoa executive chairman Gonzalo Urquijo said: “Abengoa has successfully fulfilled the plan which was drawn up to ensure the company’s viability, particularly regarding its disinvestment commitments.
“The agreement on this second shareholding package reached with Algonquin, in addition to the strategic agreement with this company in relation to AAGES, constitutes an important achievement in this regard and highlights our special relationship with APUC”.
Headquartered in Oakville, APUC has $10bn of assets across the US and Canada representing over 1.25GW of installed capacity.