Primary Energy shareholders approve takeover arrangement

Primary Energy Recycling Corp. (TSX: PRI) said Dec. 9 that its shareholders have approved the previously announced arrangement under which a new company formed by a consortium led by Fortistar LLC will indirectly acquire all of the outstanding common shares of Primary Energy for cash at US$5.40 per common share.

Approximately 99.97% of the votes cast at a special meeting of the shareholders held Dec. 9 were in favor of this deal.

Primary Energy is seeking a final order of the Supreme Court of British Columbia to approve the arrangement, which is expected to be granted on Dec. 11. Once the final order is received and the remaining conditions to the completion of the arrangement are satisfied or waived, Primary Energy expects that the arrangement will be completed prior to the end of this year.

Primary Energy Recycling, headquartered in Oak Brook, Illinois, owns and operates four recycled energy projects and a 50% interest in a pulverized coal facility. The projects have a combined generating capacity of 298 MW and a combined steam generating capacity of 1.8M lbs/hour. Primary Energy Recycling specializes capturing and recycling waste energy from industrial and electric generation processes and converting it into reliable and economical electricity and thermal energy for resale back to its customers.

These facilities are located in Indiana near Chicago. This includes Cokenergy LLC, which captures waste heat that is recycled into electricity and steam. Cokenergy’s electrical capacity is 95 MW and its steam capacity is 896 MLBS/HR Steam. Another facility is North Lake LLC, which recycles blast furnace gas into electricity and has an electrical capacity of 90 MW.

Fortistar, headquartered in White Plains, New York, has a 30 year history of investing in and managing power assets. From its inception, Fortistar has focused on cogeneration facilities and renewables.

Primary Energy noted in a Nov. 13 quarterly financial statement about its operations: “Due to contract renewal investments, environmental compliance and the current blast furnace reline, the Company is in a multi-year period during which cash expenditures on major plant maintenance and capital expenditures will exceed historical levels. We expect to complete the majority of the upgrade work by October 2015, but some of the upgrade work could carry over into 2016.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.