- Enters agreement for sale of 81 MW in El Arrayán Wind project to Arroyo Energy Investors -
SAN FRANCISCO, May 24, 2018 /PRNewswire/ -- Pattern Energy
Group Inc. (NASDAQ and TSX: PEGI) ("Pattern Energy" or the "Company") today announced it has entered into an agreement for the
sale of the Company's operations in Chile, which principally consist of its 81 megawatt ("MW")
owned interest in the 115 MW El Arrayán Wind project ("El Arrayán Wind"), to affiliates of Arroyo Energy Investors ("Arroyo") for
which Pattern Energy will receive cash consideration of $67.0 million. This price represents a cash
available for distribution ("CAFD") multiple that is greater than the CAFD multiple for projects the Company has acquired in the
past. Pattern Energy also expects to eliminate more than $1.0 million of annual overhead related to
managing the business in Chile.
"The sale of El Arrayán Wind is an excellent result for us. The price represents a 30 percent uplift over El Arrayán Wind's
contribution to the Company's current value," said Mike Garland, CEO of Pattern Energy. "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. The proceeds of the sale will
go to either make further accretive investments, pay down debt, buy back stock or other corporate purposes. We want to thank our
employees in Chile who have been outstanding, loyal, smart and demonstrated an excellent work
ethic. We could not have asked for a better team."
El Arrayán Wind is located approximately 400 km north of Santiago on the coast of
Chile. The facility commenced commercial operations in the second quarter of 2014 and
approximately 70% of its production is contracted for sale through a long-term fixed-for-floating hedge with Minera Los
Pelambres.
The transaction is expected to close within 90 days, subject to customary closing conditions.
Because the marketing for the sale of El Arrayán Wind was conducted concurrently with the marketing for the sale of
Conejo Solar, a project in Chile owned by Pattern Energy Group LP
("Pattern Development 1.0"), the Conflicts Committee of the Board of Directors of Pattern Energy (which is comprised entirely of
independent directors) reviewed and considered the El Arrayán Wind transaction in accordance with Pattern Energy's conflict of
interest policies, including with respect to the relative purchase price of El Arrayán Wind and Conejo
Solar and waiver of Pattern Energy's Right of First Offer (the "ROFO") over Conejo Solar.
The Board of Directors of Pattern Energy approved the El Arrayán transaction and waiver of the ROFO rights related to
Conejo Solar, which will be sold to Arroyo concurrent with the El Arrayán Wind transaction.
About Pattern Energy
Pattern Energy Group Inc. (Pattern Energy) is an independent power company listed on the NASDAQ Global Select Market
and Toronto Stock Exchange. Pattern Energy has a portfolio of 24 wind and solar power facilities, including one project it has
agreed to acquire, with a total owned interest of 2,861 MW in the United States, Canada and Japan that use proven, best-in-class technology. Pattern
Energy's wind and solar power facilities generate stable long-term cash flows in attractive markets and provide a solid
foundation for the continued growth of the business. For more information, visit www.patternenergy.com.
About Arroyo Energy Investors
Arroyo Energy Investors is an independent private equity firm that focuses on investing in energy infrastructure
assets in the power generation and midstream space in North and South America. Arroyo Energy
Investors has offices in The Woodlands, Texas and Santiago,
Chile. For more information, visit www.arroyoenergygroup.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities
laws, including statements regarding the ability to close the sale of El Arrayán, the existence of embedded value within Pattern
Energy's assets, and the use of proceeds from the sale. These forward-looking statements represent Pattern Energy's expectations
or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Pattern
Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking
statements.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Pattern Energy
does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information,
future events or otherwise. New factors emerge from time to time, and it is not possible for Pattern Energy to predict all such
factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary
statements in Pattern Energy's annual report on Form 10-K and any quarterly reports on Form 10-Q. The risk factors and other
factors noted therein could cause actual events or Pattern Energy's actual results to differ materially from those contained in
any forward-looking statement.
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SOURCE Pattern Energy Group Inc.