Algonquin finds a partner

Article Excerpt

ALGONQUIN POWER INCOME FUND $3.14 (Toronto symbol APF.UN; Units outstanding: 77.9 million; Market cap: $244.6 million; SI Rating: Extra Risk) has formed a partnership with Emera Inc. (Toronto symbol EMA). Emera is a recommendation of The Successful Investor, our affiliated publication. Emera will pay $27.6 million for a 9.9% stake in Algonquin. It will also have the right to buy an additional 5% of the renewable-power fund over the next two years. As well, Algonquin and Emera have formed a 50/50 joint venture that will pay $116 million U.S. for the Sierra Pacific Power Company’s power-generation and distribution businesses. Sierra serves 47,000 customers in Lake Tahoe, California. The partners plan to finance half of the purchase, and Algonquin will use the funds from its stock sale to Emera to pay cash for most of its remaining share of $29 million U.S. Algonquin pays out just 40% of its cash flow to unitholders. Its units yield 7.6%. Buying Sierra will likely add only a..

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