Algonquin Power Acquires Cogeneration Facility in California

On May 1, 2002, Oakville, Ontario-based
Algonquin Power Income Fund, through its
wholly owned indirect subsidiary, Sanger Power,
LLC, completed the acquisition of a 43.5
megawatts cogeneration facility in Sanger,
California. Electrical energy produced by the
facility is sold under a long-term power purchase
agreement to Pacific Gas and Electric Company
(PG&E). The transaction included the purchase
of certain assets and real property from Dynamis
Incorporated, the purchase of shares of an
affiliate of Dynamis and the purchase of certain
assets from, and assumption of liabilities of, J.P.
Morgan Trust Company, National Association, in
its capacity as trustee for Viacom Inc., all relating
to the cogeneration facility.
Algonquin and Sanger satisfied the
approximately $79.5 million purchase price
through a combination of cash, the issuance of
trust units of Algonquin and the assumption of
liabilities relating to approximately $30 million of
tax-exempt bonds previously issued by the
California Pollution Control Financing Authority
(CPCFA). In connection with the assumption of
the bond liabilities, Algonquin posted a letter of
credit issued by its primary lender, the National
Bank of Canada, in favour of the bond trustee,
Deutsche Bank Trust Company Americas, to
replace the previous letter of credit issued by
Dynamis’s lender, Credit Suisse First Boston
Corporation.
Blake, Cassels & Graydon LLP represented
Algonquin and Sanger, with a team led by Ken
Pearce, and assisted by Ian Goldberg, Les Wong
and Linda Lam. Alex Moore and Ellen
Fleishhacker of Howard, Rice, Nemerovski,
Canady, Falk & Rabkin acted as California
special counsel. Steve Opler, Della Wager Wells
and Bill Boone of Alston & Bird LLP provided U.S.
bankruptcy, municipal bond and securities law
advice to Algonquin.
Dynamis was represented by Stikeman Elliott in
Montreal, with a team comprised of Sidney Horn,
Kevin Kyte and Geneviève Lavertu. In the U.S.,
Dynamis was represented by Dale Bacigalupi
(corporate and real estate) of Bacigalupi, Neufeld
& Rowley, and Steven Greenwald, Paul Smith,
Leanne Bober, Lindsey How-Downing and
James Waggoner of Davis Wright Tremaine LLP
advised Dynamis on its power sales
agreements, natural gas arrangements and on
matters relating to the PG&E bankruptcy
proceeding.
J.P. Morgan and Viacom were represented by
David Retter and Jeanne Solomon of Kelley Drye
& Warren LLP in New York, and Robert
Dannhauser and Brad Smith of McCann,
Garland, Ridall & Burke, respectively.
Best Best and Krieger LLP acted as bond
counsel to CPCFA, with a team comprising John
Rottschaefer and Kyle Snow.
Credit Suisse was represented by Andrew
Singer, Rafael Muilenburg and Dan Brunton of
Latham and Watkins. National Bank of Canada
was represented by in-house counsel Andrée
Grimard for international and capital markets,
and by Jonathan Bristol and Karen Raihofer of
Pitney, Hardin, Kipp & Szuch LLP in New Jersey.