PATTERN ENERGY GROUP INC. (NASDAQ:PEGI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
Stillwater Purchase and Sale Agreement
On November 20, 2018, Pattern Energy Group Inc. (“Pattern Energy”) and Vertuous Energy LLC (“Vertuous”), a wholly owned subsidiary of the Public Sector Pension Investment Board (“PSP Investments”), entered into and consummated a Purchase and Sale Agreement (the “Stillwater PSA”) with Pattern Energy Group 2 LP to purchase certain indirect ownership interests in Stillwater Wind, LLC. Stillwater Wind, LLC owns an approximate 80 megawatt (“MW”) wind project (the “Wind Project”) located in Stillwater County, Montana which achieved commercial operations in late October. Pattern Energy indirectly owns 51% of the membership interests in a holding company which holding company owns all of the Class B membership interests in an underlying project holding company for the Wind Project, entitling Pattern Energy to a 43% initial interest in the distributable cash flows produced by the Wind Project. Immediately after the closing, the Company's owned interest with respect to the Wind Project was approximately 35 MW.
Pattern Energy’s purchase consideration under the Stillwater PSA was approximately $23 million which was funded using available liquidity.
The Stillwater PSA included customary representations by the parties thereto, including as to due authorization, non-contravention, governmental consents and approvals, enforceability, ownership and title, no litigation or adverse claims, tax and holding company matters and, in the case of the seller, certain matters with respect to the project companies and underlying Wind Project. The Stillwater PSA provides for customary indemnification by the parties thereto, for breaches of representations or covenants, which indemnification is subject to customary limitations including, among other things, a cap and time limits.
The Stillwater PSA was previously recommended by the Conflicts Committee of Pattern Energy’s board of directors (the “Pattern Energy Board of Directors”), which is comprised solely of independent directors, for approval by the Pattern Energy Board of Directors, and was approved by the Pattern Energy Board of Directors.
Arrangements between Pattern Energy, Vertuous and PSP Investments relating to the Stillwater PSA
to the Stillwater PSA, Vertuous purchased the remaining 49% of the membership interests in the holding company that owns the Class B membership interests in the underlying project holding company for the Wind Project. In connection with the consummation of the Stillwater PSA, on November 20, 2018, the limited liability company agreement of the holding company was amended and restated (the “A&R LLC Agreement”). The A&R LLC Agreement sets forth provisions relating to governing the affairs of the holding company, including with respect to (among other things) the disposition of interests by a member, the capital accounts of members, distributions and allocations among members, the management of such LLC, and consents required for certain actions.
In addition, to a Reimbursement Agreement, Pattern Energy and PSP Investments agreed to allocations of certain payments between each other which might become payable under certain guaranties relating to the Wind Project.
PSP Investments holds approximately 9.5% of Pattern Energy’s outstanding Class A common stock.
The foregoing descriptions of each of such agreements under this Item 1.01 do not purport to be complete and are qualified in their entirety by reference to each of such agreements which are included as exhibits to this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On November 26, 2018, the Company issued a press release relating to the consummation of the agreement to purchase the Wind Project. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 9.01. Financial Statements and Exhibits.
Pattern Energy Group Inc. ExhibitEX-10.1 2 exhibit101-stillwaterpsa.htm EXHIBIT 10.1 Exhibit EXHIBIT 10.1EXECUTION VERSIONPURCHASE AND SALE AGREEMENTby and amongPATTERN ENERGY GROUP INC.,…To view the full exhibit click
About PATTERN ENERGY GROUP INC. (NASDAQ:PEGI)
Pattern Energy Group Inc. is an independent power company focused on owning and operating power projects. The Company holds interests in over 18 wind power projects located in the United States, Canada and Chile with total capacity of over 2,644 megawatts (MW). Each of its projects has contracted to sell its output pursuant to a power sale agreement. The Company sells its electricity and environmental attributes, including renewable energy credits (RECs), to local utilities under long-term and fixed-price power purchase agreements (PPAs). The Company’s operating projects are Gulf Wind, Texas; Hatchet Ridge, California; St. Joseph, Manitoba; Spring Valley, Nevada; Santa Isabel, Puerto Rico; Ocotillo, California; South Kent, Ontario; El Arrayan, Chile; Panhandle 1, Texas; Panhandle 2, Texas; Grand, Ontario; Post Rock, Kansas; Lost Creek, Missouri; K2, Ontario; Logan’s Gap, Texas, Amazon Wind Farm Fowler Ridge, Indiana, and Armow Wind power facility in Ontario, Canada.