Millar Western’s position in Sundance C PPA terminated
By Millar Western
March 24, 2016 - Today, Capital Power Corporation (Capital Power) gave notice of its intent to terminate its role as buyer of the Sundance C Power Purchase Arrangement (Sundance PPA, the Arrangement), effective March 24, 2016. As a result of Capital Power's termination, Millar Western's role as a member in the Power Syndicate Agreement (Sundance C) is also terminated.
In 2001, Millar Western joined a multi-party syndicate headed by Capital Power to enter into the Sundance PPA. Capital Power has announced it is exercising its right to terminate the Sundance PPA under the Arrangement's Change in Law provisions, following amendments to the Specified Gas Emitters Regulation that became effective in 2016.
At February 29, 2016, the net book value of Millar Western's position in the Sundance PPA was $21.0 million. The company expects to record a non-cash charge of $21 million in the first quarter of 2016 to reflect the termination. There are $11.1 million in loans associated with the PPA that are now due and payable on June 30, 2016. Between now and 2020, the termination is expected to have a positive impact on the company's EBITDA.
About Millar Western Forest Products Ltd.
Millar Western is a family-owned forest products company headquartered in Edmonton and operating a high-yield pulp mill in Whitecourt and dimension lumber mills in Whitecourt and Fox Creek, Alberta.
Source: Millar Western Forest Products Ltd.