KKR to acquire Emera’s equity interest in critical clean energy
transmission project
This news release constitutes a “designated news release” for
the purposes of Emera’s prospectus supplement dated November 14,
2023 to its short form base shelf prospectus dated October 3,
2023.
- Transaction value of $1.19 billion CAD.
- Proceeds from the transaction will be used to reduce Emera’s
corporate debt and support its investment opportunities in its
regulated utility businesses.
- KKR has a history of successful long-term investments in
similar scale infrastructure projects.
- Transaction is expected to close on or about June 4, 2024.
Today, Emera Inc. (Emera), an international energy and services
company, and KKR, a leading global investment firm, announced they
have entered into a definitive agreement where KKR will acquire
Emera’s indirect minority equity interest in the Labrador Island
Link (LIL). The transaction value is $1.19 billion CAD, made up of
$957 million CAD in cash and $235 million CAD for assuming Emera’s
obligation to fund the remaining initial capital investment.
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As part of its overall commitment to the Lower Churchill
Project, Emera has been an equity investor in the construction of
the LIL alongside Newfoundland and Labrador Hydro (NL Hydro), which
owns and operates the LIL. The transaction announced today provides
for a one-time, up-front payment at closing in exchange for Emera’s
indirect interest in the LIL, meaning KKR will receive quarterly
distribution payments over the remaining life of the 50-year LIL
contract and allow Emera to reduce corporate debt and fund its
investments in its regulated utility businesses. Emera will remain
actively engaged in the LIL partnership, along with NL Hydro, by
continuing to provide sustaining capital investments to support
ongoing operations. This transaction has no impact on Emera’s
ownership of the Maritime Link transmission line and no impact on
Nova Scotia Power, or its customers.
“This agreement is an important step in strengthening our
company and positioning us to continue to capitalize on the growth
opportunities in front of us, said Scott Balfour, Emera Inc. CEO.
“With this transaction, we look forward to a new relationship with
KKR while remaining committed to our partnership with NL
Hydro.”
“KKR has a long history of investing in stable, reliable and
essential transmission assets like the Labrador Island Link, and we
look forward to beginning this long-term strategic partnership with
Emera and NL Hydro to deliver clean energy across the region,” said
Brandon Freiman, KKR Partner and Head of North American
Infrastructure. “We’re pleased to be part of the future success of
the Labrador Island Link.”
“The LIL is a strategic asset for Newfoundland and Labrador as
it continues down the path of building its clean energy future,”
said Jennifer Williams, CEO, Newfoundland and Labrador Hydro. “This
new arrangement is evidence of the quality of the LIL and the
critical role that it plays to harness clean, renewable energy and
deliver it to our customers here in Newfoundland and Labrador
across the region and beyond.”
The LIL is a 1,100 km high voltage transmission line that
delivers renewable energy to Newfoundland, Nova Scotia and beyond,
helping meet the growing demand for clean energy across the region.
Officially commissioned in 2023, the LIL is a vital transmission
line of strategic importance to Atlantic Canada and has helped
strengthen the Newfoundland and Labrador power grid.
The Lower Churchill Project is helping enhance energy
infrastructure and facilitate clean energy delivery between the
provinces and is essential in supporting the energy transition in
Atlantic Canada. The Project also includes the Maritime Link, an
Emera-owned transmission line that delivers renewable energy from
Newfoundland to Nova Scotia.
KKR’s interest in the LIL reinforces the importance of clean
energy infrastructure to serve Atlantic Canada and markets beyond.
KKR has significant experience investing in infrastructure globally
and has stable, ongoing access to capital, which affords the firm
the ability to take a long-term “buy and hold” view. KKR is making
this investment through capital accounts advised by KKR.
The transaction is expected to close on or about June 4,
2024.
TD Securities is acting as exclusive financial advisor to Emera
in connection with the transaction. Scotiabank is acting as
exclusive financial advisor to KKR.
About Emera
Emera is a geographically diverse energy and services company
headquartered in Halifax, Nova Scotia with approximately $39
billion in assets and 2023 revenues of $7.6 billion. The company
primarily invests in regulated electricity generation and
electricity and gas transmission and distribution, with a strategic
focus on transformation from high carbon to low carbon energy
sources. Emera has investments in Canada, the United States and the
Caribbean.
About NL Hydro
Newfoundland and Labrador Hydro (NL Hydro) is a provincial crown
utility—providing safe, cost-conscious, reliable electricity while
harnessing sustainable energy opportunities to benefit the people
of Newfoundland and Labrador. NL Hydro manages Newfoundland and
Labrador’s electricity system, generating and transmitting the vast
majority of electricity used by people in the province every day.
For more than 50 years, Hydro has been there for families, friends,
and neighbours across the province–and beyond. For more
information, visit nlhydro.com.
About KKR
KKR is a leading global investment firm that offers alternative
asset management as well as capital markets and insurance
solutions. KKR aims to generate attractive investment returns by
following a patient and disciplined investment approach, employing
world-class people, and supporting growth in its portfolio
companies and communities. KKR sponsors investment funds that
invest in private equity, credit and real assets and has strategic
partners that manage hedge funds. KKR’s insurance subsidiaries
offer retirement, life and reinsurance products under the
management of Global Atlantic Financial Group. References to KKR’s
investments may include the activities of its sponsored funds and
insurance subsidiaries. For additional information about KKR &
Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com.
For additional information about Global Atlantic Financial Group,
please visit Global Atlantic Financial Group’s website at
www.globalatlantic.com.
Forward Looking Information
This news release contains forward‐looking information within
the meaning of applicable securities laws, including statements
concerning the acquisition of Emera’s indirect interest in the LIL
by KKR, Emera’s future financial performance, the service life of
the LIL, Emera’s engagement in the LIL, including future sustaining
capital investments, and market conditions and demand for clean
energy in Atlantic Canada in the future. Undue reliance should not
be placed on this forward-looking information, which applies only
as of the date hereof. By its nature, forward‐looking information
requires Emera to make assumptions and is subject to inherent risks
and uncertainties. These statements reflect Emera management’s
current beliefs and are based on information currently available to
Emera management. There is a risk that predictions, forecasts,
conclusions and projections that constitute forward‐looking
information will not prove to be accurate, that Emera’s assumptions
may not be correct and that actual results may differ materially
from such forward‐looking information. Additional detailed
information about these assumptions, risks and uncertainties is
included in Emera’s securities regulatory filings, including under
the heading “Business Risks and Risk Management” in Emera’s annual
Management’s Discussion and Analysis, and under the heading
“Principal Risks and Uncertainties” in the notes to Emera’s annual
and interim financial statements, which can be found on SEDAR+ at
www.sedarplus.ca.
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version on businesswire.com: https://www.businesswire.com/news/home/20240528020201/en/
Emera Media Contact Dina Bartolacci Seely media@emera.com
KKR Media Contact Liidia Liuksila media@kkr.com (212)
750-8300 NLH Media Contact Jill Pitcher
JillPitcher@nlh.nl.ca
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