Altius Renewable Royalties Announces New Operating Royalty Investment and CDN$35 million Bought Deal Financing
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ST. JOHN'S, Newfoundland and Labrador, Dec. 01, 2022 (GLOBE NEWSWIRE) -- Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) (“ARR”, the “Corporation”, or the “Company”) reports that Great Bay Renewables II (“Great Bay”), its subsidiary that is jointly controlled with funds managed by affiliates of Apollo Global Management (“Apollo”), has entered into a US$46 million royalty investment agreement with Longroad Energy (“Longroad”) to support Longroad’s acquisition of the 70 MWac Titan Solar project in Imperial County, CA (“Titan”).
Titan represents Great Bay’s first royalty investment in California. Longroad is a top-tier developer, owner, and operator of renewable energy projects that owns 1.5 GW of wind and solar projects across the US and operates and manages a total of 3.5 GW on behalf of itself and third parties. Great Bay also holds a royalty on Longroad’s operating Prospero 2 solar project in Texas.
As part of the Titan acquisition, Longroad is buying down an existing hedge associated with the project such that starting in 2026 approximately 70% of the expected revenues will be market-based with the remainder relating to contracted capacity payments and renewable energy credits.
The royalty investment has been structured using royalty rates that vary over time and achieve Great Bay’s investment hurdles while optimizing Longroad’s project level cash flow profile. Great Bay expects its royalty on Titan to contribute approximately US$3 - $3.5 million to its revenues in 2023, and to average US$4.5 - $5 million annually over its first 10 years.
ARR will fund its 50% share of the royalty investment with an equivalent amount funded by Apollo, its Great Bay level joint venture partner.
Frank Getman, CEO of Great Bay, commented, “Longroad is one of the best in the business. We are pleased to close our second royalty investment with Longroad, particularly as this investment proves a new use case for the adoption of our royalty financing, namely to support third-party project acquisitions. Our flexible, partner-like capital is increasingly proving itself to be competitive with other available sources of capital in the market today, with now approximately US$300 million in royalty investment agreements signed since inception.”