Vancouver, British Columbia-based Western Wind Energy Corp. has announced that it is putting the entire company up for sale, as well as all of its assets. The decision was reached by the company's board of directors, in consultation with its CEO, Jeff Ciachurski.
Western Wind says it has had discussions with mergers and acquisitions (M&A) advisory firms and will receive proposals over the next two weeks. Upon receipt of these proposals, the company will choose two M&A advisers to manager and administer the process.
According to a statement from the company, Western Wind's decision to sell was based on a compromise between the CEO's plan of building the assets for another two years before contemplating a sale, and the consistent "suffering [its] shareholders have endured by unregulated market participants trading the stock price down to levels that only serve to frustrate and "shake out' retail investors."
As part of the sales process, the company will take the following actions:
- Start construction on the 30 MW Yabucoa Project in Puerto Rico, which the company says will add $160 million to its balance sheet;
- Negotiate the balance of the cash-grant proceeds from the U.S. Treasury; and
- Complete the mezzanine loan facility from its senior lender in the amount of $25 million.
The sales process will take several months to complete, and requires all of the qualified parties to review the data room, physically inspect all the properties, complete legal due diligence and finalize closing documents for the winning bidder.
The company has disclosed that Ciachurski receives a bonus as part of his compensation agreement that pays out increased amounts of cash on obtaining the highest share price on the sale.
During the sale process, the two selected independent M&A advisory firms will solicit all qualified parties. To provide a sense of direction, the targeted purchasers will be large U.S. 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.
Western Wind says it 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 four producing assets; all of the revenues and cashflow from those four producing assets; the fully funded contingency accounts; the soon-to-close Yabucoa project and its cashflow, its assets and power purchase agreement; all of the company's land holdings; its application for the $45 million cash grant for the Yabucoa project; all of its advanced-stage projects; the Mesa repowering project; the company's 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, the company explains.
‘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," notes Ciachurski. "We have done this without dilution. 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."