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Jun 11, 2014
A&B Advises on IPO of European Renewable Energy Foreign Asset Income Trust
Aird & Berlis LLP acted for Transeastern Power Trust (the “Trust”) on its initial public offering of units and convertible unsecured subordinate debentures for aggregate gross proceeds of approximately $23,000,000. The Units and Debentures are listed on the TSX Venture Exchange and trade under the symbols “TEP.un” and “TEP.db”, respectively. The Units and Debentures were offered pursuant to a prospectus dated March 31, 2014 filed with the securities regulatory authorities in each of the provinces of Canada, except Québec, and were underwritten by a syndicate of underwriters led by Canaccord Genuity Corp. and which included GMP Securities L.P. The IPO closed on May 28, 2014.
Proceeds of the IPO were used to acquire three hydroelectric power projects in Romania comprised of 11 run-of-river hydroelectric power plants with total capacity of over 5.1 MW. Each of the power projects is an independent Romanian hydroelectric power producer that generates and sells, or expects to generate and sell, electricity to licensed electricity buyers in Romania. Through its direct and indirect subsidiaries in Canada, the Netherlands and Romania, the Trust was formed to acquire interests in renewable energy assets in Romania, other countries in Europe and abroad that can provide stable cash flow and a suitable risk-adjusted return on investment.
The Trust is one of the first foreign asset income trusts (known as FAITs) to go public in Canada and the first European based renewable energy FAIT listed on a Canadian stock exchange. A FAIT is a “mutual fund trust” structure that is not subject to the Canadian SIFT rules largely due to its foreign asset base, and thus for tax purposes operates in a fashion similar to the previously popular “income trust” structure.
The A&B team advising the Trust was led by Richard Kimel and included Rebecca Kacaba, Margaret Nelligan, Chris Berrigan and Graham Topa (Corporate Finance), Francesco Gucciardo (Tax) and Ron Clark (Energy).