BRIDGETOWN, Barbados — Emera Inc. has announced that its wholly-owned subsidiary Emera Caribbean Limited has agreed to sell its 19.1 percent indirect interest in St Lucia Electricity Services Ltd (LUCELEC) to Light and Power Holdings Ltd (LPH), also an Emera Inc. subsidiary, for US$25.8 million.
"This acquisition will allow for greater cooperation between two leading electric utilities in the Eastern Caribbean," stated Peter Williams, managing director of LPH. "LPH having an equity stake in LUCELEC will allow for a sharing of skills and increased efficiencies that we believe will result in benefits to customers in both countries."
LPH is an investment company and the owner of The Barbados Light and Power Company Limited, a licensed supplier of electricity energy in Barbados. Formed as a holding company in 1997, LPH was created to allow shareholders to take full advantage of potential investment opportunities in and outside of Barbados, including equity investments in other utilities. The acquisition of 19.1 percent of LUCELEC is consistent with this mandate. LPH is 80 percent owned by Emera Inc.
LUCELEC is a vertically integrated electric utility serving more than 60,000 customers, with an exclusive licence to generate, transmit and distribute electricity on the island of St Lucia to the year 2045. The utility has 76 MW of generation capacity, primarily oil fired, and 1,000 Km of electricity transmission and distribution assets.
LUCELEC’s managing director, Trevor Louisy, welcomed news of the investment, noting, "It marks the start of a new era in the utility sector in the region. Clearly the region has the financial and technical capacity to make such investments, which was unheard of in the past, and is indicative of a maturing of the sector. It also suggests that LUCELEC has been and continues to be a sound investment option."
The terms of the acquisition agreement between Emera Caribbean and LPH provide for a potential sales price increase or decrease of US$4 million within 30 months of the closing date of the transaction. Any adjustment would be triggered by either an additional public offering by LUCELEC; or a change in its allowed return on equity as a result of a change in its regulatory framework.
This acquisition is subject to relevant government and regulatory approvals and is expected to close in the fourth quarter of 2011.