The JV has been established on a 75:25 basis between Canadian firms Abitibi and Caisse de depot et placement du Quebec, the latter having also provided a 10-year unsecured, non-recourse term loan of $250M to help fund the purchase of assets.
ACH now holds eight hydroelectric plants in its portfolio with a total installed capacity of 136.8MW. The normalised annual generation from the plants is 828GWh. Under the new ownership arrangements, the company has agreed to continue to own and manage ACH's hydro facilities.
The new JV will be the strategic growth vehicle for Abitibi in the energy sector, it said in a statement. The international company's primary business is newsprint and commercial print, which includes recycling print, and it also produces wood products.
Abitibi's intention to separate off its hydro assets was announced in January. Advisers on the transaction were Scotia Capital and CIBC World Markets.
