Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) (“ARR”,
the “Corporation”, or the “Company”) reports that Great Bay
Renewables II (“
Great Bay”), its subsidiary that
is jointly controlled with funds managed by affiliates of Apollo
Global Management (“
Apollo”), has entered into a
US$46 million royalty investment agreement with Longroad Energy
(“
Longroad”) to support Longroad’s acquisition of
the 70 MWac Titan Solar project in Imperial County, CA
(“
Titan”).
Titan represents Great Bay’s first royalty
investment in California. Longroad is a top-tier developer, owner,
and operator of renewable energy projects that owns 1.5 GW of wind
and solar projects across the US and operates and manages a total
of 3.5 GW on behalf of itself and third parties. Great Bay also
holds a royalty on Longroad’s operating Prospero 2 solar project in
Texas.
As part of the Titan acquisition, Longroad is
buying down an existing hedge associated with the project such that
starting in 2026 approximately 70% of the expected revenues will be
market-based with the remainder relating to contracted capacity
payments and renewable energy credits.
The royalty investment has been structured using
royalty rates that vary over time and achieve Great Bay’s
investment hurdles while optimizing Longroad’s project level cash
flow profile. Great Bay expects its royalty on Titan to contribute
approximately US$3 - $3.5 million to its revenues in 2023, and to
average US$4.5 - $5 million annually over its first 10 years.
ARR will fund its 50% share of the royalty
investment with an equivalent amount funded by Apollo, its Great
Bay level joint venture partner.
Frank Getman, CEO of Great Bay, commented,
“Longroad is one of the best in the business. We are pleased to
close our second royalty investment with Longroad, particularly as
this investment proves a new use case for the adoption of our
royalty financing, namely to support third-party project
acquisitions. Our flexible, partner-like capital is increasingly
proving itself to be competitive with other available sources of
capital in the market today, with now approximately US$300 million
in royalty investment agreements signed since inception.”
“Longroad is excited to once again work with
Great Bay by using its innovative royalty financing as part of our
capital structure”, said Pete Keel, Longroad’s CFO. “Great Bay’s
flexible, partner-like investment approach is a great fit with our
business and we look forward to working with its team again in the
future as we continue to grow our operational portfolio.”
Brian Dalton, CEO of ARR, commented, “Our Great
Bay joint venture continues to steadily build upon its first mover
advantage in bringing royalty financing to the renewable energy
natural resource sector and to grow and diversify its portfolio of
cash-flowing royalties. The new power region and use case
attributes of the Titan royalty financing further support our
outlook regarding the growing size of our potential addressable
market as we continue to work to rapidly scale up the business.
Today’s concurrent bought-deal equity financing announcement
further supports this ambition with additional deployment-focused
cash liquidity.”
CDN$35 Million Bought Deal
Financing
The Company is also pleased to announce that it
has entered into an agreement with a syndicate of underwriters led
by TD Securities Inc. and Cormark Securities Inc. (the “Lead
Underwriters” and collectively the “Underwriters”) pursuant to
which the Underwriters have agreed to purchase, on a bought deal
basis, 3,900,000 common shares of the Company (the “Shares”) at a
price of CDN$9.00 per Share (the “Issue Price”) for aggregate gross
proceeds of approximately CDN$35 million (the “Offering”).
The Company has granted the Underwriters an over-allotment
option (the “Over-Allotment Option”) to purchase up to an
additional 585,000 Shares at the Issue Price, exercisable in whole
or in part at any time up to 30 days after the closing of the
Offering.
Altius Minerals Corporation (“Altius”) is participating in the
Offering and has committed to purchase approximately CDN$21 million
in Shares at the Issue Price to allow Altius to maintain its
approximate 59% ownership of the Company at closing of the
Offering.
The Company intends to use the net proceeds from the Offering to
fund its 50% of the acquisition price for Great Bay’s Titan royalty
investment and for general corporate purposes.
The Offering is expected to close on or about December 8, 2022
and is subject to certain conditions including, but not limited to,
the receipt of all necessary approvals, including the approval of
the Toronto Stock Exchange (the “TSX”).
The securities to be issued under the Offering
will be offered by way of a prospectus supplement that will be
filed in each of the provinces and territories of Canada under the
Company's base shelf prospectus dated March 1, 2022 and may be
offered for sale in the United States to Qualified Institutional
Buyers (as defined in Rule 144A under the United States Securities
Act of 1933, as amended (the "1933 Act") by way of private
placement pursuant to an exemption from the registration
requirements of the 1933 Act.
The securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements. This
news release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
About ARR
ARR is a renewable energy royalty company whose
business is to provide long-term, royalty level investment capital
to renewable power developers, operators, and originators. ARR has
32 renewable energy royalties representing 735 MW of renewable
power on operating projects and an additional approximately 6 GW on
projects in development phase, across several regional power pools
in the U.S. The Corporation also expects future royalties from
Great Bay’s investments in Bluestar Energy Capital and Hodson
Energy. The Corporation combines industry expertise with
innovative, partner-focused solutions to further the growth of the
renewable energy sector as it fulfills its critical role in
enabling the global energy transition.
Forward-looking information
This news release contains forward‐looking
information as defined under Canadian securities laws which reflect
management’s current expectations. Some of the specific
forward-looking statements contained herein include, but are not
limited to, the projected revenues on Great Bay’s royalty on Titan,
statements with respect to the growth of the addressable market,
the expected closing date of the Offering and the intended use of
proceeds. The statements are based on reasonable assumptions and
expectations of management and ARR provides no assurance that
actual events will meet management's expectations. In certain
cases, forward‐looking information may be identified by such terms
as "anticipates", "believes", "could", "estimates", "expects",
"may", "shall", "will", or "would". Although ARR believes the
expectations expressed in such forward‐looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those projected. Such forward-looking statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Readers should not
place undue reliance on forward-looking information. ARR does not
undertake to update any forward-looking information contained
herein except in accordance with securities regulation. A number of
factors could cause actual results to differ, possibly materially,
from the results discussed in the forward-looking statements.
Additional information about risks and uncertainties is contained
in the filings of ARR under the Company’s profile at
www.sedar.com.
For further information, please contact:
Flora WoodEmail: Flora@arr.energyTel: 1.877.576.2209 Direct:
+1.416.346.9020 |
Ben LewisEmail: Ben@arr.energyTel: +1.877.576.2209 |
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