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Capital Power Corp T.CPX.PR.A


Primary Symbol: T.CPX Alternate Symbol(s):  CPXWF | CPRHF | T.CPX.PR.C | CPWPF | T.CPX.PR.E

Capital Power Corporation is a growth-oriented power producer company. The Company develops, acquires, owns, and operates renewable and thermal power generation facilities and manages its related electricity and natural gas portfolios. It is involved in the operation of electrical generation facilities within Canada and in the United States. The Company has approximately 9,300 megawatts (MW) of power generation capacity at 32 facilities across North America. Its projects under construction include over 140 MW of renewable generation capacity and 512 MW of incremental natural gas combined cycle capacity from the repowering of Genesee 1 and 2 in Alberta, and over 350 MW of natural gas and battery energy storage systems in Ontario and approximately 70 MW of solar capacity in North Carolina in advanced development. Its La Paloma facility is located in Kern County, California. The Company also has a Harquahala natural gas generation facility in Arizona.


TSX:CPX - Post by User

Comment by DeanEdmontonon Nov 22, 2023 12:28pm
222 Views
Post# 35748662

RE:RE:RE:RE:RE:RE:Accretive acquisition

RE:RE:RE:RE:RE:RE:Accretive acquisitionAlwayslongs- I agree with you and the point about the shares repricing to the new issue is a good thought as well.
AlwaysLong683 wrote:
Look like high quality assets to me and the discount on the subscription receipts ($36.45) is not outrageous. 
 
If the entire over-allotment is exercised (which will likely be the case), a total of 12.2M new shares will be issued. According to TMX Money, CPX currently has  toal of just over 117M shares outstanding, so this equity offering will add just over 10% to the count.
 
The remainder of CPX's part of the purchase price is "...expected to be addressed via senior and hybrid debt financing at the corporate level, subject to market conditions..."
 
IMO, this is a pricey acquisition for a company the size of CPX, but the behemouth that is Blackrock partnering 50/50 with CPX via one of its businesses should provide some level of confidence that CPX didn't overpay for these assets. The key for CPX is being able to handle the extra debt they will be taking on and what interest rate(s) they will be paying on that new debt - should be reasonable given CPX's cash flow, but interest rates are significantly higher than they have been for years, so CPX will be paying more than they would have say, a year or two ago.
 
Lastly, pretty typical that the share price would drop to around the offering price per share on the day the deal is announced given the discount offered by the company.
 




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