Great Lakes Hydro Income Fund Announces Closing of $380 Million Subscription Receipts Financing

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GATINEAU, Quebec, July 24, 2009 (GLH.UN) - Great Lakes Hydro Income Fund (the “Fund”) announced today that it has successfully closed a bought-deal public offering (the “Offering”) of 12,242,500 subscription receipts (“Subscription Receipts”) for gross proceeds of approximately $185 million, and the sale to certain institutional investors, on a private placement basis (“Private Placement”), of 13,320,000 Subscription Receipts for gross proceeds of approximately $195 million. The Offering and Private Placement, originally announced on July 6, 2009, resulted in total gross proceeds of approximately $380 million.

The Offering and the Private Placement were led by Scotia Capital Inc. and CIBC World Markets Inc., with a syndicate that included RBC Dominion Securities Inc., TD Securities Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., HSBC Securities (Canada) Inc., Canaccord Capital Corporation and FirstEnergy Capital Corp.

As previously announced, the Fund intends to use the net proceeds from the Offering and Private Placement as partial consideration for (i) the acquisition of 15 hydroelectric stations and one soon-to-be-constructed wind power project from Brookfield Renewable Power Inc. (“BRPI”); and (ii) an increase in the price that BRPI pays the Fund for power generated at the Fund’s Lièvre and Mississagi facilities (collectively, the “Transaction”). The proceeds from the Offering and Private Placement will be held in escrow pending the completion of the Transaction.

The closing of the Transaction is subject to customary closing conditions and the receipt of all necessary regulatory approvals, including approval by the Fund’s minority unitholders. A special meeting of unitholders has been called for August 19, 2009 to approve the Transaction, which is expected to close in the third quarter of 2009.

Each Subscription Receipt entitles the holder to receive, for no additional consideration, one trust unit of the Fund upon closing of the Transaction. The Subscription Receipts issued to private placement purchasers are subject to resale restrictions under applicable securities laws.

On closing of the Transaction, BRPI will acquire 25,562,500 trust units of the Fund at a price equal to the weighted average price of the Subscription Receipts issued under the Offering and the Private Placement representing a total amount of approximately $380 million. Following closing of the Transaction, BRPI will continue to hold its approximate 50.01% ownership interest in the Fund on a fully-exchanged basis.

The Subscription Receipts issued under the Offering are listed for trading on the Toronto Stock Exchange under the symbol “GLH.R”

 

This news release shall not constitute an offer of securities for sale in the United States. The Subscription Receipts and the underlying Trust Units offered will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold into the United States absent registration or an exemption from registration. There shall not be any public offering of the Subscription Receipts and the underlying Trust Units in the United States.

 

About Great Lakes Hydro Income Fund

Great Lakes Hydro Income Fund (www.greatlakeshydro.com) is a premier Canadian income fund and one of the largest power income funds in North America with 1,260 megawatts of power generating capacity and average annual production of 4,539 gigawatt hours.

Great Lakes Hydro Income Fund produces electricity exclusively from environmentally friendly and renewable resources. The Fund indirectly owns or holds interests in 27 high quality hydroelectric generating stations and one wind farm in four distinct geographic regions across North America: Quebec, Ontario, British Columbia and New England.

Brookfield Renewable Power Inc., which comprises all the power operations of Brookfield Asset Management, owns approximately 50.01% of the Fund’s outstanding units on a fully exchanged basis.

Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.

Unitholder enquiries should be directed to Zev Korman, Director, Investor Relations and Communications at (416) 359-1955 or unitholderenquiries@greatlakeshydro.com.

 

Forward Looking Information

This news release contains forward-looking statements and information within the meaning of Canadian securities laws.  Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact.  Forward looking statements in this press release include statements regarding the closing of the proposed Transaction, its timing and impact on the business, operations, financial condition and tax position of the Fund. Forward-looking statements can be identified by the use of words such as “will”, “continued”, “intends”, “positions”, “expect”, “look forward” or variations of such words and phrases.  Although the Fund believes that the Fund’s anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, it can give no assurance that such expectations will prove to have been correct. The reader should not place undue reliance on forward looking statements and information as such statements and information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. 

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to the risk that the Transaction does not close; other risks associated with the Transaction and achieving the anticipated benefits, risks associated with the Transaction and the Fund’s possible conversion to a corporation; changes in hydrology and wind conditions; equipment failure; failure by counterparties to fulfill contractual obligations and failure by the Fund to replace contracts; the Fund’s dependence on Brookfield Renewable and potential conflicts of interest between Brookfield Renewable and the Fund; failure by the Fund to discover liabilities associated with, and inability of the Fund to successfully integrate, acquisitions and other risks and factors detailed from time to time in the Fund’s public filings including the Short Form Prospectus dated July 16, 2009 under the heading “Risk Factors”; the Annual Information Form dated March 20, 2009 under the heading “Risk Factors”; and the Management Discussion and Analysis of Financial Results for the fiscal year ended December 31, 2008 under the headings “Business Environment” and “Risk Factors”.  We caution that the foregoing list of important factors that may affect future results is not exhaustive. Except as required by law, the Fund undertakes no obligation to publicly update or revise any forward looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

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