Capital Power announces closing of $400 million subscription receipts offerings

Press Release

November 28, 2023

EDMONTON, Alberta – Capital Power Corporation (“Capital Power” or the “Company”) (TSX: CPX) announced today that it has completed its previously announced public and private placement offerings of subscription receipts (collectively the “Offerings”). The public offering consisted of the issuance of 8,231,000 subscription receipts (the “Public Subscription Receipts”), on a bought deal basis, at an issue price of $36.45 per Public Subscription Receipt (the “Offering Price”), for total gross proceeds of approximately $300 million (the “Public Offering”) pursuant to an underwriting agreement with a syndicate of underwriters (the “Underwriters”) led by TD Securities Inc. and National Bank Financial Inc. The Company has granted the Underwriters an over-allotment option to purchase, in whole or part, up to an additional 1,234,650 Public Subscription Receipts at the Offering Price to cover over-allotments, if any, exercisable at any time and from time to time until the date that is 30 days following the closing of the Public Offering. If the over-allotment option is exercised in full, gross proceeds from the Public Offering will be approximately $345 million.

Concurrently, the Company issued 2,745,000 subscription receipts (together with the Public Subscription Receipts, the “Subscription Receipts”) at the Offering Price to Alberta Investment Management Corporation (“AIMCo”) on a private placement basis for gross proceeds of approximately $100 million (the “Private Placement”). TD Securities Inc. acted as the sole agent and bookrunner for the Private Placement.

Each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration or further action, upon the first to close of the Acquisitions (as defined below), one common share of Capital Power.

The net proceeds from the Offerings will be used to partially finance the previously announced acquisitions of (i) 100% of the equity interests in CXA La Paloma, LLC, which owns the 1,062 MW La Paloma natural gas generation facility in California, and (ii) 50% of the equity interests in New Harquahala Generation Company, LLC, which owns the 1,092 MW Harquahala natural gas generation facility in Arizona (collectively, the “Acquisitions”) from CSG Investments, Inc., a subsidiary of Beal Financial Corporation, which are expected to close in the first quarter of 2024, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. Details of the Acquisitions and the Offerings were announced on November 20, 2023.

The gross proceeds from the sale of the Subscription Receipts less one-half of the Underwriters’ fee for the Public Offering and the capital commitment fee for the Private Placement (the “Escrowed Funds”) will be held in escrow by Computershare Trust Company of Canada, as subscription receipt agent for the Offerings (the “Subscription Receipt Agent”), and invested in interest-bearing deposits with banks and other financial institutions with issuer credit ratings with S&P Global Ratings, Inc. of at least A (as contemplated by, or specified in, the subscription receipt agreements for the Offerings) or other approved investments as set forth in the subscription receipt agreements for the Offerings, provided that Dividend Equivalent Payments may be made from the Escrowed Funds and the interest credited or received thereon from time to time, as described above.

The Public Subscription Receipts will begin trading on the Toronto Stock Exchange under the symbol CPX.R.

All references to dollar amounts contained herein are to Canadian dollars unless otherwise indicated.

U.S. Securities Laws Disclosures

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute an offer of securities for sale in the United States, nor may any securities referred to herein be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and the rules and regulations thereunder. The securities referred to herein have not been registered pursuant to the U.S. Securities Act or any state securities laws, and except pursuant to exemptions from registration requirements in the U.S. Securities Act or any state securities laws, there is no intention to register any of the securities in the United States or to conduct a public offering of securities in the United States.

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