Negotiating the balance of the cash grant proceeds from treasury; - Completion of the mezzanine loan facility from the company's senior lender in the amount of $25-million, which can repay the high-cost corporate notes.
Completing the above allows Western Wind, in the opinion of the board, to be sold, subject to market conditions and shareholder approval, at a level between the October, 2011, Algonquin "bear hug" bid and the published DAI Management Consultants valuation.
The sales process will take several months to complete. It requires all of the qualified parties to review the data room, physically inspect all the properties, both producing and in development, complete legal due diligence, and finalize closing documents for the winning bidder. During these several months, Western Wind will complete the above task items and continue to operate and grow Western Wind by adding cash flow and any accretive assets that increase the value to the sale price, enabling its shareholders to maximize value on closing.
The CEO of Western Wind receives a bonus within his compensation agreement that pays out increased amounts of cash on obtaining the highest share price on the sale. Western Wind emphatically states that the CEO and board are highly motivated to achieve the highest sales price and are the only parties able to achieve the highest sale price possible.
During the sale process, the two selected independent mergers and acquisitions advisory firms will solicit all qualified parties. To provide a sense of direction, the targeted purchasers will be large United States energy companies, large regulated U.S. electrical utilities and their non-regulated subsidiaries, and integrated U.S. oil and gas companies that have existing renewable energy production portfolios. The independent mergers and acquisitions advisory firms will determine the quickest and most efficient timeline that will include candidate selection, due diligence review, winning bid determination, documentation, regulatory, shareholder and judicial approval. The company anticipates the next seven reporting periods to be record setting; therefore, the potential purchaser will be acquiring a company with an existing real-time revenue growth portfolio. The company is meeting with two large U.S. electric utilities this week to discuss its assets.
The assets being sold will comprise all of the company's current four producing assets, all of the revenues and cash flow from those four producing assets, the fully financed contingency accounts, the soon to close Yabucoa project and its cash flow, its assets and production per year, all of the company's extensive landholdings, both fee simple and lease, the company's application for the $45-million cash grant for Yabucoa, all of the company's advanced stage projects, the Mesa repower, the company's extensive development pipeline, and after the Yabucoa close, over $450-million in tax depreciation.
This compromise will allow Western Wind to maximize its sale value without the shareholders having to wait any longer. Jeff Ciachurski, CEO of Western Wind, stated: "After starting Western Wind with a few hundred thousand dollars back in 2000, we will in essence be selling a half-billion-dollar energy company. We have done this without dilution. We are known throughout the industry to have leading-edge PPAs and producing assets and a proprietary knowledge of the entire industry, its players and premium deal flow. In the first seven years, we had a retail shareholder base where dedication, passion and trust helped us move against negative markets and expand under challenging times. We are, in a way, a victim of our own success. We have kept the shares outstanding, incredibly small; we did not pay advisory fees to buy favour with stock analysts, and as a result, we watch many friends since 2000 suffer at the hands of a few self-serving analysts and their unregulated clients. The sale process, by including the Yabucoa financial close and a few remaining development items, will allow the long-standing Western Wind shareholders to achieve their reward.
"We would like to advise that the present management and board will have its hands full completing the sale of the company and completing the few remaining delicate issues to maximize the sale price. At the upcoming annual general meeting on Sept. 25, Western Wind would like to issue a message to the shareholders that if any market participant decides to launch a proxy battle in the midst of this very technical and time-consuming sales effort, the sale price will be greatly impaired by a self-destructive potential proxy battle. This is the time to have peace and close a 12-year chapter. Allow the architects and builders of this fine company to complete the sale and maximize the sale value for the benefit of all shareholders."
We seek Safe Harbor.