Algonquin Power & Utilities Corp. has recently announced that its Board of Directors has taken the initiative to conduct a strategic review of the Renewable Energy Group. The primary objective of this review is to enhance shareholder value by exploring various alternatives for the group.
The Renewable Energy Group encompasses all of the company's non-regulated power generation assets that are currently operational and under development. These assets comprise a diverse portfolio of renewable and clean power generation facilities, primarily situated across Canada and the United States. As of December 31, 2021, the group's hydroelectric, wind, solar, and thermal facilities collectively possess a gross generating capacity of approximately 2.3 GW. Moreover, approximately 82% of the power output is sold through long-term contractual agreements, which boast an average remaining contract life of around 12 years.
Arun Banskota, the President and CEO of AQN, expressed his confidence in both the Renewable Energy Group and the Regulated Services Group, stating that they have developed into robust businesses with substantial scale and high-quality assets. Banskota also emphasized that these groups are well-positioned to benefit from the ongoing energy transition. However, he believes that the market does not fully appreciate the value of these assets. Consequently, AQN has initiated the strategic review of the Renewable Energy Group, with the primary objective of charting a course that ensures the continued growth of each business unit, achieves a lower cost of capital, and maximizes shareholder value. The results and future plans arising from this review are expected to be announced during the second quarter earnings call.
To oversee the strategic review process, the Board of Directors has formed a dedicated Strategic Review Committee, consisting of directors Chris Huskilson (chair), Amee Chande, and Dan Goldberg. Additionally, AQN has enlisted the services of J.P. Morgan as its financial advisor to provide assistance throughout the review process.
It is important to note that the strategic review may or may not culminate in any transaction or the execution of a specific strategic alternative, as highlighted by AQN.
AQN, the parent company of Liberty, is a utility enterprise engaged in generation, transmission, and distribution services, boasting total assets valued at over $17 billion. Through its Regulated Services Group and Renewable Energy Group, AQN remains steadfast in its commitment to delivering safe, reliable, cost-effective, and sustainable energy and water solutions. With a significant presence in the renewable energy sector, AQN owns, operates, and holds net interests in more than 4 GW of installed renewable energy capacity.
