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Innergex to sell Magma Energy Sweden for US$304.8M

Innergex Renewable Energy Inc. announced March 25 that it has reached a deal to sell its Magma Energy Sweden AB subsidiary for US$304.8 million, or C$408.8 million, to a European infrastructure fund managed by Macquarie Infrastructure and Real Assets.

Magma Energy Sweden owns an approximately 53.9% interest in HS Orka hf., which owns two operating geothermal facilities totaling 174 MW in Iceland. HS Orka also owns the under-construction Brúarvirkjun run-of-river hydro project, a number of prospective renewable power projects and a 30% equity interest in the Blue Lagoon Geothermal Spa and Resort in Iceland.

"Given Innergex's non-operatorship role in HS Orka, we viewed the sale of this non-core asset to be consistent with our long-term strategy of developing, owning and operating high quality renewable energy assets in our core markets and competencies," Innergex President and CEO Michel Letellier said. Innergex is selling its entire interest in Icelandic assets with this deal.

Innergex plans to use net proceeds from the sale to reimburse the C$228 million, one-year credit facility it contracted to acquire the remaining interest in the Cartier wind farms in Quebec, to deleverage corporate facilities and for general corporate purposes.

The company intends to satisfy deal closing conditions in the second quarter of 2019.

If the deal closes at the end of the second quarter, Innergex expects an increase of 10% in power generation, 7% in revenues, and 11% in adjusted EBITDA in 2019. Its prior financial projections was increase of 20% for power generation, 15% for revenues and 15% for adjusted EBITDA.

BMO Capital Markets and Stöplar Advisory are acting as financial advisors and McCarthy Tétrault LLP is acting as legal counsel to Innergex.